Law360 Canada ( January 13, 2026, 9:13 AM EST) -- Appeal by DEML Investments Limited (DEML) against the decision of the Tax Court of Canada dismissing its appeal. The Minister of National Revenue (the Minister) applied the general anti-avoidance rule (the GAAR) in s. 245 of the Income Tax Act (the Act) to deny a capital loss claimed by DEML on a sale of an interest in a partnership in 2010. DEML carried back the loss to offset gains in its 2007 taxation year. The transactions giving rise to the loss stemmed from Direct Energy Marketing Limited’s 2008 acquisition of resource properties from Transglobe Energy Corporation, which were later transferred through subsidiaries 1377116 Alberta Ltd. and 1389673 Alberta Ltd., partnerships, and a corporate reorganization. The Tax Court found that the series of transactions produced an artificial capital loss because DEML continued to hold the resource properties, whose value was also deductible through cumulative Canadian oil and gas property expense (CCOGPE) pools. The Tax Court concluded that the transactions abused the capital loss and paragraph 88(1) of the Act....