Précis: The taxpayer’s husband was a tax debtor. He transferred funds (roughly $62,000) over a period of 5 years either into their joint account or the taxpayer’s personal account. The funds were primarily used for normal household expenses, including mortgage payments on the home which was owned by the taxpayer. The taxpayer argued, unsuccessfully, that $9,500 of the amount at issue had been taken back by her husband immediately and used in his law practice. As to the balance of the funds the taxpayer argued that she gave adequate consideration by providing her husband with a home and necessities. Relying on the prior Federal Court of Appeal decision in Yates, the Tax Court dismissed the appeal holding that the provision of basic necessities did not constitute “consideration” for the purposes of subsection 160(1) of the Income Tax Act. Costs were awarded to the Crown.
Elander v. R. – TCC: Subsection 160(1) assessment not defeated where funds used for household expensesREAD MORE »