Hall v. The Queen, 86 DTC 6208, [1986] 1 CTC 399 (FCTD) -- summary under Debt/ receivables

The taxpayers incorporated a Canadian corporation ("Quebec") to purchase a business (of which they were key employees) from the U.S. company owning the business ("Delaware"). In satisfaction of the purchase price, Quebec gave a promissory note to Delaware for $453,332, bearing interest at 9%, payable monthly, with the principal due in ten years' time, and the taxpayers entered into an agreement to purchase the promissory note for $250,000, $75,000 of which was payable in twenty-semi annual non-interest bearing instalments and the balance of $175,000 was due in ten years' time, also without interest. Five years later, the parties entered into transactions which resulted in the taxpayers acquiring the promissory note and (ultimately) realizing gains totaling approximately $200,000. In finding that these gains were on income account, Collier J. noted (at p. 6213) that "it is well known tax law that even a single transaction can be an adventure in the nature of trade" and that the purchase of the promissory note was not an investment.