The taxpayer, which was in the business of developing and selling real estate, acquired, in an arm's length transaction and for a purchase price of approximately $70,000, all the shares of a corporation ("Fraserview") whose sole asset was a parcel of land having a cost amount of approximately $7.5 million. Mara then wound-up Fraserview in accordance with s. 88(1) and immediately thereafter sold the land in an arm's length sale for approximately $3.0 million.
La Forest J., without providing detailed reasons, found that in these circumstances the property retained its character as inventory in the hands of the taxpayer with the result that it realized a non-capital loss on the sale.