Précis: The taxpayer was the sole owner of a building the she leased to Wise Victoria Mortgages Inc. (“WVM”), a corporation of which she and her son were the principal shareholders. WVM had a 5 year lease on the business portion of the building with an option to renew for a further 5 years. The lease commenced in 2010 with a base rent of $2,200 per month. WVM made extensive renovations on the building amounting to a total of $457,663 in 2011 and a further $164,005 in 2012. CRA included these amounts in the taxpayer’s income as shareholder benefits. The Court allowed the appeal, holding that there was no evidence of the increase in value of the building, if any, at the end of the lease by virtue of the renovations. Costs were awarded to the taxpayer in accordance with Tariff B.
Wise v. R. – TCC: Improvements made by tenant corporation to leased building did not result in taxable shareholder benefits to shareholder who owned the buildingREAD MORE »