Introduction – Buy Low, Sell High Donation Arrangement
and the Issue of Roher v the Queen
Over the past decade, there has been a flurry of CRA audit of
"buy low, sell high" donation arrangements as well as
subsequent appeals to the Tax Court of Canada. The basis for
CRA's reassessment of a buy low sell high donation tax shelter is simple: the item
donated by an individual donor had a lower fair market value than
what was initially reported by the donor. However, various related
legal and evidentiary issues were disputed and given answers by the
Court as different buy low sell high donation schemes were
litigated between taxpayers and the CRA.
One of the common issues that arises during the tax litigation
of a buy low sell high donation arrangement is the admissibility of
expert evaluation or expert appraisals of the fair market value of
the donated items. The taxpayer in these tax cases would often
present expert testimony from professional appraisers as well
