Précis: Mr. Leonard claimed a non-capital loss in the amount of $1,472,006 in 2011 arising out of foreclosure proceedings in a complex land deal. CRA denied the loss. That also had the result of increasing the family income which reduced the Canada Child Tax Benefit which his wife had claimed. They both appealed to the Tax Court. The issue in the main appeal was whether the loss incurred by Mr. Leonard was on income or capital account. The Tax Court found that there was another issue to be determined, i.e., the quantum of the loss.
The Tax Court found that Mr. Leonard was engaged in an adventure in the nature of trade and that the loss was on income account. Nevertheless the Court concluded that Mr. Leonard’s loss claim was overstated and reduced his loss to $826,426. Thus both his appeal and that of his spouse were allowed.
Leonard v. R. – TCC: Taxpayer partially successful in claiming loss on foreclosure proceeding was deductible – adventure in the nature of tradeREAD MORE »