Friesen v. Canada, 95 DTC 5551, [1995] 3 SCR 103 -- summary under Subsection 10(1)

The taxpayer, who along with others held an interest in an undeveloped real estate property as an adventure or concern in the nature of trade, was able to deduct an unrealized decline in the value of his share of the property in computing his income. Among other arguments, Major J. rejected a contention that s. 10(1) applies only to those who "carry on a business", and that s. 10(1) was merely a codification of the common law practice with respect to the valuation of inventories at the lower of their cost or fair market value, a practice which was restricted in its scope to "stock-in-traders". Although it was not necessary to resort to the object and purpose of the provision, the above interpretation was consistent with an objective of restricting trading in pregnant losses (as reflected in a subsequent amendment to Regulation 1801).