Words and Phrases - "profit à prendre"

a
88
b
44
c
80
d
54
e
38
f
31
g
20
h
14
i
74
j
2
k
2
l
32
m
56
n
25
o
38
p
81
q
3
r
77
s
90
t
47
u
16
v
9
w
23
y
2

10 March 2015 External T.I. 2014-0552551E5 F - Vente du droit d'exploiter une sablière

Summary Under
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(g)
sale of rights to extract sand generally not caught unless a profit à prendre

A partnership which owns a "qualified farm or fishing property" sells the right to operate the sand pit to a municipality for a fixed sum. Does a capital gain or business income result? After noting that the criteria in IT-373R2, para. 12 on Woodlots applied to this question, CRA went on to discuss s. 12(1)(g):

Generally, the courts have rejected the application of this paragraph in the case of an isolated transaction for a specified period and at a specified price. In the absence of a profit à prendre that is, an ongoing continuous right of use, as contrasted to a one-time sale, the courts have generally concluded that a sale resulted in a capital gain and that paragraph 12(1)(g) did not apply.

Words and Phrases
profit à prendre
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Real Estate application of capital gains criteria on woodlots to sale of rights to extract sand 51
Tax Topics - Income Tax Act - Section 110.6 - Subsection 110.6(1) - Qualified Farm or Fishing Property sale of rights to extract sand could be considered sale of qualified farm or fishing property 180