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Such income would be subject to Article VII of the Convention and Canada's right to tax that income would depend on whether the partnership was considered to have carried on business in Canada through a permanent establishment situated therein. ... Subject to Article XXI of the Convention, in our opinion, regardless of whether or not the partnership is considered to be carrying on a business in respect of its investment in the trust, income distributions, including taxable capital gains (see paragraph 17 of Interpretation Bulletin IT-465R), from the trust are considered to be dealt with under Article XXII of the Convention. ... " Regardless of whether the partnership is considered to be carrying on a business in respect of its investment in the trust, income of a trust is generally considered a separate source of income for purposes of Part I and Part XIII of the Act by virtue of paragraph 108(5)(a) and subsection 212(9) of the Act, respectively, and would fall within Article XXII of the Convention. ...

Accordingly, where the individual lives in the South for 1 or 2 years at a time, he would not be considered to have "... resided... in a prescribed area... ... Since the students are not employed by the School Boards or the corporation that paragraph will not apply. (2) In accordance with Interpretation Bulletin IT-75R2 it is our view that amounts paid by the School Boards and the corporation for personal expenses, course fees, etc. to enable students to pursue their education would be considered as scholarships or bursaries for the purposes of paragraph 56(1)(n) of the Act. (3) Similarly, if the amounts can be considered to be allowances provided by a government authority for adult occupational training, such amounts also would be considered as scholarships or bursaries under paragraph 56(1)(n) of the Act. (4) In the cases described in (2) and (3) the amounts paid to, or on behalf of, a student would be included in computing his income. ... This would apply with respect to a stay in one place for a short period in which a taxpayer may be considered to be still in travel status and would include, in our opinion, the period and the circumstances that you described. ...

Accordingly, where the individual lives in the South for 1 or 2 years at a time, he would not be considered to have "... resided... in a prescribed area... ... Since the students are not employed by the School boards or the corporation that paragraph will not apply. (2) In accordance with Interpretation Bulletin IT-75R2 it is our view that amounts paid by the School Boards and the corporation for personal expenses, course fees, etc. to enable students to pursue their education would be considered as scholarships or bursaries for the purposes of paragraph 56(1)(n) of the Act. (3) Similarly, if the amounts can be considered to be allowances provided by a government authority for adult occupational training, such amounts also would be considered as scholarships or bursaries under paragraph 56(l)(n) of the Act. (4) In the cases described in (2) and (3) the amounts paid to, or on behalf of, a student would be included in computing his income. ... This would apply with respect to a stay in one place for a short period in which a taxpayer may be considered to be still in travel status and would include, in our opinion, the period and the circumstances that you described. ...

In particular, it is your contention that in the hypothetical situation described above, Corporation A should be considered a Canadian-controlled private corporation as control in fact, to the exclusion of all others, rests with Corporation B. ... Nevertheless, it is important to note that a corporation can be considered to be controlled at the same time by several persons or groups of persons. ... Therefore, in the hypothetical situation outlined in your letter, Corporation N will be considered to control Corporation B directly whereas, Corporation A will be considered to control Corporation B indirectly. ...

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. ...

During the strike period, which is considered to be broken service, the employees did not make contributions to the pension plan, administered by the XXX. ... Since the XXX pension plan cannot make a direct payment to XXX and the XXX is used only as a conduit for the transfer of the funds, it is our view that the funds would be considered to have been paid to the employee by the XXX pension plan. The amount of funds allocated to the employee would be considered a pension benefit and would, therefore, be included in his income pursuant to subparagraph 56(1)(a)(i) of the Act in the year in which the amount was received. ...

Interpretation Bulletin IT-448 entitled "Dispositions- Changes in Terms of Securities", dated June 6, 1980 states the Department's views on events that may be considered to constitute dispositions of shares. ... Assuming that the hypothetical situation that you describe involves a section 86 reorganization, the preferred shares held by the daughter would, for the reasons given earlier, be considered to have been issued to the daughter. The other shares, that is, the common shares issued to the son, would be considered to have been issued to a person described by clause 6205(2)(a)(ii)(D) of the Regulations, that is, a person who did not deal at arm's length with the daughter, the original holder. ...

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. ...

In particular, it is your contention that in the hypothetical situation described above, Corporation A should be considered a Canadian-controlled private corporation as control in fact, to the exclusion of all others, rests with Corporation 8. ... Nevertheless, it is important to note that corporation can be considered to be controlled at the same time by several persons or groups of persons. ... Therefore, in the hypothetical situation outlined in your letter, Corporation N will be considered to control Corporation 8 directly whereas, Corporation A will be considered to control Corporation 8 indirectly. ...

9 November 1989 Income Tax Severed Letter AC58821- Acknowledgement 5-8821 R.C. 0'Bryne (613) 957-8821 19(1) NOV- 9 1989 Dear Sirs: 24(1) This will acknowledge your letter of October 4, 1989 in which you provided a brief summary of some of the facts which you think should be considered when reviewing the 24(1) case. The contents of your letter will be considered as part of our review of this case. ...