Tax Court of Canada


Income tax

Tax credits

Taxpayer failed to provide evidence or opinion on how values could be extrapolated back to decade ago

Taxpayer donated 21 bottles of wine made up of different labels and vintages to two charities and charities appraised fair market value of bottles at $22,600 over decade ago. None of wines were available at Liquor Control Board of Ontario (LCBO). Canada Revenue Agency (CRA) reassessed taxpayer and assigned value of $4,700, which represented about 20 per cent of amounts receipted by charities. Taxpayer’s expert calculated, based on global wine seller’s 2016 prices, that prices for wines were $5,500 and CRA’s expert valued known sales based on wine auctions available to taxpayer as resident in Ontario, over decade ago, at $2,650. Taxpayer appealed. Appeal dismissed. Critical problem with taxpayer’s expert’s valuation was that she did not provide evidence or opinion on how her values could be extrapolated back to decade ago. Since Ontario had actual, lawful and available real markets in which resident wanting to obtain as high price as possible for bottle of wine could participate, there was no need to consider creating proxy marketing to evaluate value of bottles of wine. CRA’s expert evidence was from completed auction sales at single large U.S. consignment auction house, and this amount was far inferior to values used by CRA in reassessments. Accordingly, appeal had to be dismissed, as CRA could not be ordered to reassess using lower value than used in reassessments.

McCuaig Balkwill v. The Queen (2018), 2018 CarswellNat 2849, 2018 TCC 99, Patrick Boyle J. (T.C.C. [General Procedure]).

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