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In the event the $300,000 is not deductible, will the fee be considered to be income to Holdco in its 1993 year? ... Will the bonus be considered remuneration to Mr. A in 1993 and taxable in his hands in that year? ...

Consequently, when a dividend that gives rise to the dividend refund is paid by the payer corporation, that portion of the dividend sufficient to give rise to the dividend refund would be considered to be paid out of safe income of the payer corporation. In the hypothetical situation described above, if the amount of the $125 dividend which is subject to Part IV tax is $25, this portion of the dividend received by Newco and subject to tax under Part IV of the Act would be considered to be paid out of the safe income of Opco. ...

Such income and benefits are considered to be property of an Indian on a reserve. In order to reach that decision the Court had to conclude that the situs of the debtor (being on a reserve) is not the sole factor to be considered in exempting income from taxation since unemployment insurance benefits are not paid from a reserve. ...

With respect to the wording set out above, we would first note that if the grandmother only pays amounts that can be regarded as being for her accommodation and meals, it is our view that no amount should be considered to have been paid as support for the granddaughter. ... It is, accordingly, our view that the granddaughter should be considered to be wholly dependent solely on her parents for support. ...

Response to your first question The at-risk rules are relevant for a partner in a general partnership when he is considered a limited partner by virtue of one or more of the paragraphs (a) to (d) of subsection 96(2.4) of the Act. ... Consequently, a general partner of such a partnership will not be considered to be a limited partner by virtue of paragraph 96(2.4)(b) of the Act only by reason of the non- recourse or limited recourse loan. ...

According to subsection 13(27), the vessel will be considered to be available for use at the earliest of: (a) the time at which the property is first used by the taxpayer to earn income (which is 1993 in the case at hand), (g) where the property is acquired by a fisherman to be used in fishing, the time at which the property has been delivered and is capable of performing the function for which it was acquired (which is 1992 in the case at hand), and (h) where the property is a vessel for which one or more permits, certificates or licences are required to be obtained, the time at which all such permits, certificates or licences have been obtained (your question did not state any relevant facts). Where the vessel requires a permit, certificate or licence in order to be operated legally, it is our view that the vessel could not be considered to be capable of performing the function for which it was acquired until such permit, certificate or licence is obtained. ...

You may wish to consider whether the arrangement would be considered to be an employee benefit plan, a salary deferral arrangement or a retirement compensation arrangement. ... Factors to be considered in determining the fair market value of an interest in a life insurance policy are set out in paragraphs 40 and 41 of Information Circular 89-3. ...

However, if the situation to which you refer involves mainly short-term sick benefits which, in fact, is sick leave with pay to which the employee is entitled under the terms of an employment contract or collective agreement and the plan or trust is set up specifically for this purpose, benefits received by an employee would normally be considered to be ordinary salary or wages and the usual deductions for U.I.C. and C.P.P would be applicable. ... As stated in paragraph 6 of Interpretation Bulletin IT-85R2, a particular arrangement will only be considered a health and welfare trust if the trustees act independently of the employer. ...

We have reviewed the circumstances of this case as outlined above and offer the following observations: Generally, an individual who is on maternity leave is still considered to be under an employment contract, is still expected to return to her duties of employment after a specified period of leave, and is not entitled to any payments normally associated with the termination of employment. ... Consequently, it is our conclusion that the full amount of the settlement can reasonably be considered to be in respect of the general damages component of the human rights complaints. ...

XXXXXXXXXX Our Comments: Based on our understanding of the facts, it appears that the funding received by XXXXXXXXXX should be considered to be a "scholarship or bursary" as discussed in Interpretation Bulletin IT-75R2 and the special release thereto. ... Her Majesty the Queen, (78 DTC 6043) (F.C.T.D.), the scholarship may be exempt from taxation by virtue of paragraph 81(1)(a) of the Income Tax Act if it is paid to an Indian under a treaty or agreement between a band and Her Majesty so that it may be considered personal property of an Indian situated on a reserve within the meaning of section 87 of the Indian Act. ...