The taxpayer purchased timeshare units for cash equaling their fair market value and issued bogus promissory notes for nine times the units' fair market value as purported additional consideration for the units. He then donated the units to a registered charity and received charitable receipts for 10 times the units' fair market value.
In rejecting a submission that the taxpayer was entitled to credits for the cash portion of his "gift," on the basis that he received no benefit under this "deal" other than the charitable receipts, Near JA stated (at para. 28):
[I]t was not open to the judge to conclude that the pretence documents were "of no value" at the time that Mr. Berg consummated the "deal." ... He used them to support his initial claim for inflated tax credits.
Furthermore, the taxpayer did not have the requisite donative intent, as he "did not intend to impoverish himself by transferring the timeshare units" but instead "intended to enrich himself ... from inflated tax credit claims" (para. 29).