Boersen v. The Queen, 2007 DTC 1696, 2007 TCC 671 (Informal Procedure) -- summary under Paragraph 12(1)(c)

An action by the taxpayer for a total of $68,000 in interest and principal owing to him under a loan to his uncle and a debtor company was settled by the payment to him of $11,500. The settlement agreement was silent as to the allocation of the settlement payments as between principal and interest, and the payors did not make any allocation of the payments as between principal and interest (although a T5 reporting slip was issued to the taxpayer). Accordingly, the taxpayer was entitled to allocate all the amounts received to principal, which the taxpayer did, so that none of the amounts received were interest income to him.