HIGHLIGHTS
* The Tax Court of Canada has dismissed the appeal of an economist and a naturopathic doctor who maintained that they had established a 10 acre Christmas tree farm on a quarter section near Calgary with a "reasonable expectation of profit", and were therefore carrying on a commercial activity which would entitle them to claim income tax credits against GST relating to roads, fences, wells, the construction of a barn, greenhouse and other work preparatory to the establishment of the tree farm. Only a portion of the 10 acre parcel had been planted for trees, and no trees had ever been sold. The Court reviews the law with respect to the concept of "reasonable expectation of profit" for start up businesses, and concluded that there was no clear intention to commence a commercial enterprise or any steps taken in support of this intention. (Living Friends Tree Farm v. Canada, CALN/2016-013, [2016] T.C.J. No. 92, Tax Court of Canada)
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