Income Tax
Income Calculation
Capital Gains and Losses
Appeal from Tax Court of Canada decision (2006 TCC 510) holding court-awarded damages for unlawful cancellation of dealer agreement with John Deere Limited constituting proceeds of disposition of capital property, subject to capital gains tax — Award paid as compensation for loss of dealership — As party to dealer agreement, appellant had legally enforceable right to compel John Deere to abide by terms thereof — Matter thus outside Manrell v. Canada, [2003] 3 F.C. 727 wherein held right not entailing exclusive, enforceable claim against anyone not “property”– Appellant abandoned right to continue as John Deere dealer in consideration for settlement payment — Mutual exchange of property bringing matter squarely within Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 40(1)(a) — Appeal dismissed.
Valley Equipment Ltd. v. Canada (A-466-06, 2008 FCA 65, Noel J.A., judgment dated 20/2/08, 12 pp.)