Walls v. Canada, 2002 DTC 6960, 2002 SCC 47, [2002] 2 SCR 684 -- summary under Business Source/Reasonable Expectation of Profit

By services, 28 November, 2015

A limited partnership that had purchased mini-warehouses was found to have a source of income for purposes of s. 9 of the Act with respect to the resulting storage park operation, given that there was no evidence of any element of personal use or benefit in the operation. This was so even though the partnership had financed the acquisition of the storage park operation almost solely with vendor take-back debt bearing interest at 24%, as well as bearing significant management fees. The Court noted that "although we state in Stewart supra, at para. 55, that reasonable expectation of profit may be used as one factor in making the overall determination as to whether or not the taxpayer's activities are personal or commercial, where, as here, the activities have no personal aspect, reasonable expectation of profit does not arise for consideration."

In addition, "although the respondents in this case were clearly motivated by tax considerations when they purchased their interests in the Partnership, this does not detract from the commercial nature of the storage park operation or its characterization as a source of income ... ."

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no REOP test in non-personal investment/ tax motivation not relevant
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