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In your letter you requested our opinion as to whether a Canadian partnership would be considered a "person" and a "taxpayer" for purposes of paragraph 1100(2.2)(e) of the Regulations and paragraphs 1101(1ad)(b) and 1102(14)(b) of the Draft Regulations. ... Our Comments a) In our opinion, a partnership may be considered to be a person and a taxpayer for the purposes of paragraph 1100(2.2)(e) of the Regulations and paragraphs 1101(1ad)(b) and 1102(14)(b) of the Draft Regulations. ... Our opinions of the outlined hypothetical situations are as follows: 1) Generally, AB Partnership and Opco would not be considered to be dealing at arm's length as they are both controlled by the same individual. 2) Generally, AB partnership and Opco would not be considered to be dealing at arm's length as they are both controlled by the same related parties. 3) Whether AB partnership and Opco are dealing at arm's length would be dependent on the facts, however, generally the ownership interests given in the hypothetical situation would indicate that AB partnership and Opco do not deal at arm's length; 4) Whether AB partnership and Opco are dealing at arm's length would be a question of fact which could only be determined when all pertinent facts of a given situation were known. ...

In our view the advances by the taxpayer can not be considered a debt owing to him. ... Otherwise, where a portion of a debt can be considered uncollectible, this portion is not considered to be bad for purposes of section 50 even though accounting practice may require a write-down to realizable value. Where an amount owing by one debtor consists of more than one debt, each debt is considered separately in determining the extent to which the above comments apply. ...

You also referred to a letter dated June 20, 1991 from us wherein we stated that, if XXXXXXXXXX were considered to be resident on a reserve, all of their employees would be considered to have received their salary or wages from an employer resident on a reserve regardless of where their duties are performed. ... " It is a question of fact where central management and control is exercised, however, should control and management of XXXXXXXXXX still be exercised on the Reserve, then they would be considered to satisfy this element of Guideline 4. ... Each activity of an organization would need to be considered on its own merits as would the employment duties of a particular employee. ...

The remaining criteria to be met are whether or not the courses can be considered to be at least 13 consecutive weeks in duration and whether or not the student can be considered to be in full-time attendance at the university under the circumstances described. ... The program described does not have all the usual characteristics of a correspondence course and is not considered a correspondence course by the XXXXXXXXXX Consequently, it is our view that the tuition fees paid would not be disallowed for this reason. ... Given our previous comments regarding whether or not a course should be considered a correspondence course, we are of the view that the courses offered by XXXXXXXXXX are not correspondence courses. ...

It is also your view that, if BCo subsequently repays another $2 million to ACo, the loan would be considered to have been disposed of by ACo and ACo would realize a loss on such repayment equal to $1.2 million (that is, the adjusted cost base of $3.2 million less $2 million) and that such a loss would be deemed to be nil pursuant to subsection 85(4) of the Act. ... We do not agree with your views as to the tax consequences of a subsequent repayment of $2 million by BCo because it is our view that such a repayment would not, by itself, result in the loan being considered to have been settled or extinguished and, hence, to have been disposed of by ACo absent an agreement or other understanding to that effect between ACo and BCo. ... Whether or not the remaining $6 million loan may be considered to have become a bad debt in a year is a question of fact that can only be determined by reference to all of the facts and circumstances of the particular case. ...

If it is concluded that the corporation carried on the fishing business the vessels leased by individual fishermen to the corporation should be considered "leasing property" as defined in subsection 1100(17) of the Regulations. ... Although the lease may be considered a transfer of property (the right of use of the licence) it can not be considered a disposition of the property (the licence). Therefore the lease arrangements would not be considered a disposition of the licence by the individual fishermen. ...

Indian Employees The tax status of income earned by Indian employees has been considered by the Courts. ... This issue was considered by the Federal Court-Trail Division in The Queen v. ... Consequently, for the years 1983 to 1990 inclusive, the employment income of an Indian is exempt if the employee performs the services on the reserve or if the employer is considered to have a permanent establishment on the reserve. ...

The Main Purpose Test is an objective test rather than a subjective one; the application of this attribution provision is based on what "may reasonably be considered to be" the main purposes of the transfer rather than what the taxpayer intended to be the main purposes of the transfer. ... It is our view that what may reasonably be considered to be one of the main purposes of the transfer is essentially a question of fact, that can best be determined by your office since you have access to the particular facts of the situation. ... Perhaps the future reduction in dividend payments to the shareholder is the result that should be considered when using the results of the transfer to assist in the determination of the purpose of the transfer. ...

It is your view that if the lump-sum payment could be considered due and unpaid at the date of death, the amount would be included in income under subsection 70(2) of the Act. However, if the OAS payments are not considered to be due and unpaid until application is made, the amount would be income of the deceased's estate. ... In view of the forgoing, it is our opinion that the lump-sum OAS benefit would be considered to be due and unpaid as of the date of death and would, therefore, be considered to be a right or thing for purposes of subsection 70(2) of the Act. ...

Therefore, they were not considered to be exempted from withholding tax by that provision. Rather, the payments were considered to be exempted by Article XIIIC of the Canada-U.S. ... Such perpetual or unlimited term payments were considered to be industrial and commercial profits for the purpose of that Convention. ...