Tax & Trade Blog

We said then: “An individual buying a run-down house, fixing it up, and living in it a while, and then selling for a tidy income tax exempt profit (the house being the individual’s principal residence) sounds like a recipe for success. [But repeat] that 21 times in a row, and you may have a different kettle of fish!”

Apparently, all you have to do is “repeat 2 times in a row” to be liable for income taxes on our profits, and uncollected GST/HST on your sales revenue!

In Mazo v The Queen (2016 TCC 232), the Tax Court of Canada considered the tax consequences applicable to income earned through an illegal pyramid scheme.  

Facts - Roberta Mazo participated in a pyramid scheme run by the company Business In Motion International Corporation (“BIMIC”). She profited from the scheme and was subsequently reassessed by the Minister of National Revenue as having unreported income for the 2007, 2008, and 2009 tax years.