The appellant purchased a parcel of land for the purpose of reselling it at a profit, constituting an adventure in the nature of trade.
The property substantially decreased in value, and the appellant sought to deduct the decline in fair market value as a business loss under s. 10(1) of the Income Tax Act.
The Minister disallowed the deduction, and the lower courts upheld this decision.
The Supreme Court of Canada allowed the appeal, holding that on a plain reading of the Act, the appellant's venture was a 'business' and the property was 'inventory', entitling him to use the inventory valuation method to recognize a business loss in the taxation years prior to disposition.
