You buy a vacant lot, build a home on it, move into the home for a few weeks and then you sell the home for a tidy profit very soon thereafter. You claim the principal residence exemption (the PRE) so that you don’t pay any tax on the profit, or so you think. The CRA, of course, has other ideas. It reassesses you on the basis that you engaged in an “adventure in the nature of trade”. That is, the CRA takes the position that you were carrying on business, of a sort, and so it treats the profit as ordinary business income. The full amount of the profit is included in your income, rather than one-half, and the PRE applies only to capital gains, not business income. The CRA also assesses GST as if the taxpayers were home builders. See Sangha v R, 2013 TCC 69, which applied the factors set out in Happy Valley Farms Ltd. v R,  2 C.T.C. 259, 7 F.T.R. 3, 86 D.T.C. 6421 (FCTD), to determine whether the appellants engaged in an adventure in the nature of trade.