INCOME TAX
Income Calculation
Deductions
Source of income—Judicial review of decision of Tax Court dismissing appeals from reassessments for 1996, 1997 taxation years—Applicant seeking to deduct rental losses—Tax Court’s decision rendered prior to release of judgment of Supreme Court of Canada in Stewart v. Canada, [2002] 2 S.C.R. 645—In Stewart, Supreme Court modified test set out in Moldowan v. The Queen, [1978] 1 S.C.R. 480—Stewart holding issue of whether or not taxpayer has source of income to be determined by looking at commerciality of activity in question—Whether sufficient degree of commerciality determined by considering factors set out in Moldowan, such as profit and loss experience in past years, taxpayer’s training, taxpayer’s intended course of action, capabilities of venture to show profit, reasonable expectation of profit—Therefore proper fox Tax Court Judge to consider whether applicant had reasonable expectation of profit, along with other factors mentioned in Moldowan—Analysis of Tax Court Judge consistent with reasoning in decisions in Stewart and Moldowan—No reversible error in Tax Court Judge’s assessment of evidence or analysis of appropriate factors in determining whether or not applicant carrying on business—Application dismissed.
Jarquio v. Canada (A-477-01, 2003 FCA 80, Sexton J.A., judgment dated 13/2/03, 5 pp.)