Realtyco is a CCPC holding in Canada six buildings each containing 50 residential units, which it rents out. The sole services provided by it to the tenants are maintenance of the common areas and snow removal. There is a full-time caretaker at each building (for six in total).
In order to determine that there is an “active business carried on by a corporation” it is not sufficient for Realtyco to satisfy the more than 5 full-time employee test. It first must be considered to be carrying on a business. Would the income generated by Realtyco from the six buildings qualify as “income of the corporation for the year from an active business” for purposes of s. 125(1)(a)?
CRA indicated that in order for there to be an "active business carried on by a corporation" as defined in s. 125(7), it was necessary to first consider that Realtyco’s activities constituted a "business.” Before indicating that this was a question of fact, CRA stated:
The concept of "business" is accorded an expanded meaning by subsection 248(1) by being defined in particular as including an undertaking of any kind whatever:
CRA also noted that the concept of “carrying on” a business was broadly defined in Timmins.