Magicuts Inc. v. Canada, 2001 DTC 5665, 2001 FCA 332 -- summary under Capital Loss v. Loss

In order to strengthen the balance sheet of its U.S. subsidiary, the taxpayer contributed a trade receivable to the subsidiary, with the amount contributed credited in part to paid-in surplus and in part to contributed surplus. Given that there was a resulting change in use of the amount represented by the trade debt to capital, an ensuing loss of the taxpayer was on capital account.