Inglis v. The Queen

Inglis v. The Queen
Court (s) Database
Tax Court of Canada Judgments
Date
2004-01-09
Neutral citation
2004 TCC 28
File numbers
2003-2975(IT)I
Judges and Taxing Officers
Leslie M. Little
Subjects
Income Tax Act
Decision Content
Docket: 2003-2975(IT)I
BETWEEN:
BRUCE INGLIS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Appeal heard on January 6, 2004 at Vancouver, British Columbia
Before: The Honourable Justice L.M. Little
Appearances:
For the Appellant:
The Appellant himself
Counsel for the Respondent:
Gavin Laird
____________________________________________________________________
JUDGMENT
The appeal from the assessment made under the Income Tax Act for the 2000 taxation year is allowed, without costs, and the assessment is referred back to the Minister of National Revenue for reconsideration and reassessment to permit the Appellant a further deduction in the amount of $65.53 in accordance with the attached Reasons for Judgment.
Signed at Vancouver, British Columbia, this 9th day of January 2004.
"L.M. Little"
Little, J.
Citation: 2004TCC28
Date: 20040109
Docket: 2003-2975(IT)I
BETWEEN:
BRUCE INGLIS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Little, J.
A. FACTS:
[1] In 1993 the Appellant and two associates purchased a property in Nanaimo, British Columbia (the "Property"). The Property contained four rental units.
[2] The price paid for the Property was $251,500.00.
[3] The Purchasers obtained a mortgage (the "Mortgage") in the amount of $188,625.00. The balance of the purchase price was paid in cash by the Appellant and his associates.
[4] The Appellant paid $9,300.00 in cash to purchase a 12.5% interest in the Property.
[5] Over the years the units in the Property were rented out to various tenants.
[6] In June 2000 the Property was sold for $183,000.00. The Appellant's liability under the Mortgage and the mortgage liability of his associates was assumed by the Purchaser. The Appellant did not receive any cash on the sale of the Property.
[7] When the Appellant filed his income tax return for the 2000 taxation year he completed the Terminal Loss Form provided by the Canada Customs and Revenue Agency ("CCRA") and concluded that he was entitled to claim a terminal loss in the amount of $16,012.00.
[8] Officials of the CCRA audited the Appellant's 2000 income tax return and concluded that the terminal loss suffered by the Appellant on the sale of the Property was $10,864.88. The CCRA issued a Notice of Reassessment and reduced the terminal loss suffered by the Appellant to $10,864.88.
[9] The Appellant filed a Notice of Objection to the Reassessment.
[10] An official of the Appeals Section of the CCRA concluded that the terminal loss suffered by the Appellant on the sale of the Property was $9,300.00.
B. ISSUE:
[11] Is the terminal loss of $9,300.00 as determined by the officials of the CCRA properly calculated?
C. ANALYSIS:
[12] During the hearing the Appellant argued that in determining the cost of the Property for the purposes of calculating the terminal loss suffered by him, he should not be required to include the Mortgage that was obtained when the Property was purchased.
[13] I do not agree. In determining the ordinary meaning of the words "cost or purchase price" for the purpose of calculating the terminal loss suffered on the sale of the Property it is necessary to include all cash paid plus the Mortgage that was obtained.
[14] I have carefully reviewed the calculations used by the CCRA in determining the terminal loss that may be claimed by the Appellant and I have concluded that the calculations of the Minister are correct, i.e. the terminal loss suffered by the Appellant was $9,300.00.
[15] During the hearing, counsel for the Respondent conceded that the Appellant was entitled to deduct a further amount of $65.53. This amount represents 12.5% of the GST of $524.30 that was paid to the lawyer when the Property was sold.
[16] The terminal loss suffered by the Appellant when the Property was sold should be calculated as follows:
Terminal Loss
As calculated by the CCRA
$9,300.00
As conceded by counsel for
the Respondent
65.53
Total Terminal Loss to be allowed
$9.365.53
[17] The appeal is to be allowed, without costs, to permit the Appellant a further deduction in the amount of $65.53.
Signed at Vancouver, British Columbia, this 9th day of January 2004.
"L.M. Little"
Little, J.
CITATION:
2004TCC28
COURT FILE NO.:
2003-2975(IT)I
STYLE OF CAUSE:
Bruce Inglis and Her Majesty the Queen
PLACE OF HEARING:
Vancouver, British Columbia
DATE OF HEARING:
January 6, 2004
REASONS FOR JUDGMENT BY:
The Honourable Justice L.M. Little
DATE OF JUDGMENT:
January 9, 2004
APPEARANCES:
For the Appellant:
The Appellant himself
Counsel for the Respondent:
Gavin Laird
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada