Canadian Supreme Court to rule on a longstanding area of controversy

Tax Controversy & Dispute Resolution ()

When a buyer purchases business assets, it is common for the buyer to assume contingent liabilities associated with the operation of the business as part of the transaction. Must the seller take into account the value of such assumed liabilities when it determines its gross proceeds for Canadian tax purposes? Although this issue is rather fundamental, it has been the subject of much controversy in the Canadian tax arena. The Canadian Revenue Agency (CRA), taxpayers, and their advisers have been debating the matter for many years. Not surprisingly, the CRA generally believes the answer to be 'yes' whereas taxpayers and advisors may have an opposite interpretation of the law.