INCOME TAX |
Income Calculation |
Deductions |
Keeping v. Canada
A-372-99
2001 FCA 182, Rothstein J.A.
4/6/01
4 pp.
Appeal from T.C.C. decision dismissing appellant's appeal from assessment refusing deduction of losses arising from operation of Amway distributorship in 1993 and 1994 on basis had no reasonable expectation of profit--Application of reasonable expectation of profit test established in Moldowan v. The Queen, [1978] 1 S.C.R. 480 and explained in subsequent case law--Appeal allowed--In basing decision on profit margins, potential market opportunities and costs, as well as appellant's approach to operating his distributorship, T.C.J. second-guessing business acumen of appellant--In doing so, T.C.J. erred in law--Notwithstanding low profit margins, evidence of operation of other successful Amway distributorships by individuals who follow Amway business plan as did appellant.