Steeves v. The Queen, 77 DTC 5230 (FCA) -- summary under Debt/ receivables

After a corporation ("Paving") that was 50% owned by the taxpayers began experiencing financial difficulty, the taxpayers agreed with the other shareholders (the "Newfoundland group") to purchase the shares of the Newfoundland group for a nominal amount and to purchase book debts owing by Paving to companies controlled by the Newfoundland group (having a face amount of $620,633) for the sum of $70,000. The gains subsequently realized by them on repayment of the book debts were received on income account given that the purchase of the book debts occurred as an essential part of the overall plan to save Paving and given the potential rewards of the transaction.