Minister of National Revenue v. Milewski, (2000) 261 N.R. 108 (FCA)

• Judge: Létourneau, Rothstein and McDonald, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: September 26, 2000
• Jurisdiction: Canada (Federal)
• Citations: (2000), 261 N.R. 108 (FCA)

MNR v. Milewski (2000), 261 N.R. 108 (FCA)

MLB headnote and full text

Temp. Cite: [2000] N.R. TBEd. NO.009

Her Majesty the Queen (appellant) v. Edward Milewski (respondent)

(A-596-99)

Indexed As: Minister of National Revenue v. Milewski

Federal Court of Appeal

Létourneau, Rothstein and McDonald, JJ.A.

September 26, 2000.

Summary:

A taxpayer invested in rental property with a small initial cash payment. The balance of the investment was financed by borrowing. In computing his income for income tax purposes, the taxpayer claimed partnership losses and interest expenses with respect to the property. The Minister of National Reve­nue disallowed the deductions. The taxpayer appealed.

The Tax Court of Canada allowed the ap­peal. The Minister appealed.

The Federal Court of Appeal dismissed the appeal.

Income Tax - Topic 1140.4

Income from a business or property - Deductions - General - Business loss - Reasonable expectation of profit - A tax­payer invested in rental property with a small initial cash payment - The balance was financed by a 25 year loan - In com­puting his income for income tax purposes, the taxpayer claimed partnership losses and interest expenses with respect to the prop­erty - The Minister of National Revenue disallowed the deductions on the basis that the taxpayer had no reasonable expectation of profit - The Federal Court of Appeal held that the reasonable expectation of profit test was met and the losses and interest expenses were deductible.

Income Tax - Topic 1150.6

Income from a business or property - Deductions - General - Rental losses - [See Income Tax - Topic 1140.4 ].

Cases Noticed:

Moldowan v. Minister of National Reve­nue, [1978] 1 S.C.R. 480; 15 N.R. 476, refd to. [para. 3].

Stewart v. Minister of National Revenue (2000), 254 N.R. 326 (F.C.A.), leave to appeal allowed [2000] S.C.C.A. No. 184, refd to. [para. 5].

Ludco Enterprises Ltd. et al. v. Ministre du Revenu national (1999), 240 N.R. 70 (F.C.A.), refd to. [para. 12].

Counsel:

Richard Gobeil and Michelle Farrell, for the appellant;

Douglas H. Mathew and John Owen, for the respondent.

Solicitors of Record:

Morris Rosenberg, Deputy Attorney Gen­eral of Canada, Ottawa, Ontario, for the appellant;

Thorsteinssons, Vancouver, British Columbia, for the respondent.

This appeal was heard on September 26, 2000, by Létourneau, Rothstein and McDonald, JJ.A., of the Federal Court of Appeal. The court delivered its reasons for judgment orally on the same date, including the following opinions:

Rothstein, J.A. (Létourneau and Mc­Donald, JJ.A., concurring) - see para­graphs 1 to 10;

Létourneau, J.A. (McDonald, J.A., con­curring) - see paragraphs 11 to 15.