Potulicki v. Canada
T-2148-89
Joyal J.
15/4/93
9 pp.
Appeal from tax assessment disallowing certain business expenses for taxation years 1984 and 1985 -- Taxpayer's business enjoying only marginal returns over several years, having no reasonable expectation of profit -- Under Income Tax Act, s. 18(1), no deduction allowed unless made or incurred to produce income from business or property -- Concept of "reasonable expectation of profit" examined in tax cases -- Whether taxpayer has reasonable expectation of profit objective determination to be made from all facts: Moldowan v. The Queen, [1978] 1 S.C.R. 480 -- List of criteria not exhaustive -- Test of reasonable expectation of profit not prospective but retrospective -- Business not being conducted not business -- No reasonable expectation of profit when business ceased operating -- Issue of "use of or benefit to a taxpayer" not material element in determining whether business loss allowable as deduction -- Appeal dismissed -- Income Tax Act, S.C. 1970-71-72, c. 63, ss. 18(1), 248(1).