Frank Klotz v. Her Majesty the Queen

(Federal) (Civil) (By Leave)




Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

Taxation - Assessment - Fair Market Value - Charitable Gift Tax Credit - What is the fair market value of groups of limited edition prints purchased by the Applicant taxpayer and donated by him to a university - Taxpayer is entitled to a tax credit in respect of a donation based on the fair market value of the property donated - Whether the Federal Court of Appeal erred in holding that a fair market value determination is strictly a question of fact, reversible only if there has been a palpable and overriding error - Whether as a result of this error, the Federal Court of Appeal failed to properly apply the accepted judicial definition of "fair market value" to determine the fair market value of 250 limited edition original prints donated by the Applicant to a university.

The taxpayer, Mr. Klotz, purchased the 250 prints and then immediately donated to a university. The taxpayer made a claim for a charitable gift tax credit in an amount which was subsequently disallowed by the Minister. The Minister did allow a deduction in the amount at which the taxpayer had purchased the prints from the promoters. The Tax Court of Canada and the Federal Court of Appeal dismissed the appeals.

Lower Court Rulings

February 13, 2004
Tax Court of Canada

Appeal from the assessment under Income Tax Act for the 1999 taxation year allowed in part; Assessment referred back to the Minister of National Revenue solely for the purpose of deleting the penalties imposed under subsection 163(2)
May 2, 2005
Federal Court of Appeal

2005 FCA 158, A-189-04
Applicant's appeal dismissed; Respondent's cross-appeal dismissed