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Since the treaty maintains Canada's right to tax U.S. social security benefits received by a Canadian resident, in determining whether the U.S. social security benefits are situated on a reserve, the factors connecting them to a reserve must be considered. ...

Since they are not considered to be employed, they cannot contribute to the employment insurance plan. ...

Upon reviewing the above summarized transactions you are concerned that the intercompany receivable, as described in paragraphs 5 and 6 above, would not be considered as an asset attributable to a "similar obligation" issued by Opco, as that expression is used in subparagraph (c)(ii) of the QSBC share definition in subsection 110.6(1) and paragraph (b) of the "small business corporation" definition in subsection 248(1) of the Act. ...

With respect to subparagraph 55(3)(a)(ii) of the Act, in our view the proposed transactions would result in a significant increase in interest in Newco by each of A, B and C This view is consistent with the following comment contained on page 94 of the paper presented by John Robertson of Revenue Canada, Taxation at the 1981 Canadian Tax Foundation Conference:      "Where a person or persons incorporate new companies and the incorporation of these companies is involved in the series of transactions that include the payment of dividends, their interest in the new corporation will be considered as an interest in any corporation. ...

This is consistent with Justice Pinard's comments at page 6396 in the Federal Court-Trial Division case of Gaynor v The Queen (88 DTC 6394), where he states:      "...when the Income Tax Act, a Canadian statue, requires that a gain, a loss, a cost or a price be established or considered, that must be done in Canadian dollars at the relevant time, i.e. at the average exchange rate prevailing at the time such gain or loss occurs, and such cost or price is encountered. ...

While not raised by the taxpayer's representative, we considered the impact of the second test in clause (b)(i)(C) of the TaxPS definition.  ...

The Department made the following comments, which are still applicable to date, on this issue:      "...Subject to the bounds of reasonableness with respect to both the level of salary and bonus for services performed and the rate of return on investment in shares, the Department generally accepts that a principal shareholder-manager is entitled to determine a mix of salary and dividend that he considered appropriate.  ...

We considered the appropriate analysis to be whether pool balances adjusted for the sale of the oil and gas properties contained sufficient oil and gas expenses to offset the fact that the earned depletion base, which would be successored, will consist about of mining costs.  ...

Holding vacant land, in our view, cannot be considered a business use.  ...

As this type of an arrangement is considered to be an annuity contract it is subject to tax under the rules relating to annuities except in the very narrow circumstances of paragraph 3 of IT-111R.  ...