Byram v. R, 99 DTC 5117, [1999] 2 CTC 149 (FCA) -- summary under Subparagraph 40(2)(g)(ii)

The taxpayer was able to deduct losses sustained on interest-free loans made by him to a U.S. operating company of which he was initially a direct shareholder and, subsequently, an indirect shareholder. In rejecting the Crown's submission that s. 40(2)(g)(ii) required the loan to represent a direct source of income, McDonald J.A. noted (at p. 5120) that, unlike s. 20(1)(c), the provision did not refer to the use of the debt but, rather, the purpose for which it was acquired, so that there was "no need for the income to flow directly to the taxpayer from the loan".