Case information

Taxation — Income tax — Assessment — Taxpayers claiming loss arising from certain transactions — Minister’s reassessments confirmed by Federal Court of Appeal — Whether Federal Court of Appeal erred in finding that formal admission in pleading can be conditional depending on which alternative argument is ultimately advanced — Whether real, admitted-to loss is negated in tax law because there is outstanding uncollected judgment which can theoretically be collected on.

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The applicant taxpayers appealed reassessments issued from the respondent Crown in respect of the 2011, 2012, 2013 and 2014 taxation years. The 2011 reassessment disallowed a claimed non-capital loss in the amount of $1,472,006, which had been reported on for the 2011 taxation year. The reassessments for 2012, 2013 and 2014 disallowed the carry-forward of portions of the loss.

The Tax Court allowed the appeals and the reassessments were referred back to the Minister for reconsideration and reassessment. The Federal Court of Appeal dismissed the taxpayers’ appeals and allowed the Crown’s cross-appeals. The Tax Court decision was set aside and the appeals to the Tax Court would be dismissed.