Laramee v. The Queen, 2007 DTC 1723, 2007 TCC 635 -- summary under Capital Loss v. Loss

The taxpayers invested directly in the shares of a real estate development company that was developing a golf course (and of a related corporation that it was proposed would carry on operations of the golf course) but used a holding company to lend money on an interest-bearing basis to fund the project. Miller J. would have found that any loans made by them to the real estate development company would have been on income account given the speculative nature of the venture and their intention to have the golf course sold once it was operational. However, the loans advanced by them to the holding company were an investment so that the loss sustained by them on those loans was on capital account. Miller J. noted that if the project had been successful, the holding company would have received principal plus interest on its loans to the development company.