16 July 2020 Internal T.I. 2019-0817271I7 F - Indemnités reçues à la suite de la négociation -- summary under Paragraph 12(1)(x)

A governmental authority will acquire a number of residential, commercial, forestry, agricultural and undeveloped properties for a construction project pursuant to privately-negotiated terms including a sales price and further sums agreed to be paid to the owners to compensate them for various losses suffered. In the course of a general discussion, CRA indicated that compensation received for expenses incurred for the purpose of earning income from the taxpayer's business or property (e.g., compensation for the time taken to restore the remainder or for clearing or levelling the land or installing a drainage system) must also be included in computing income pursuant to s. 12(1)(x), except to the extent an election was made pursuant to s. 12(2.2) respecting a related expenditure.