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Opinion requested You ask whether the provisions of subsections 84.1(1) or 245(2) of the Act would be considered to apply. ... The position stated in Information Circular 88-2 that the amalgamation of two corporations as outlined in paragraph 4 of Supplement 1 would not be considered abusive continues to apply. ... Accordingly, they probably could not be considered to be dealing at arm's length with Newco at the time of the transfer. ...

In addition, we indicated that if the employer subsequently incurs an expense in adding to the value of the article of such jewellery, the employee would also be considered to have received a taxable benefit at that subsequent time. ... While the fair market value of the benefit involves a question of fact, the value of the article of jewellery would ordinarily be considered to be no less than the expense incurred by the employer. ... With respect to the situation under consideration, this would be the case if the use of the "fair market value" concept is not considered to be determinative of the amount that is to included in an employee's income. ...

Position TAKEN: 1.If the corporation is not a personal services business or a specified investment business, the income it earns may be considered active business income. 2.In order to qualify as a small business corporation, all or substantially all of the fair market value of the assets of the corporation must be attributable to assets used principally in an active business. ... As indicated in paragraph 21 of Information Circular 70-6R2 dated September 28, 1990, a request for a written opinion on a completed transaction is generally considered by the taxpayer's local district office. ... The Department has stated in paragraph 11 of IT-73R4, that the expression "principal purpose" is considered to be the main or chief objective for which the business is carried on. ...

The various fees listed in your letter under admission and application fees are considered tuition fees where the student does in fact enrol in the program or courses applied for. ... For example, where a student deletes 4 out of 5 course without adding any courses, the fee charged could not be considered sufficiently related to the course of instruction to be considered a tuition fee. ... As stated in paragraph 28 of the bulletin, athletic fees are not considered eligible tuition fees. ...

For the purpose of the definition of qualifying active business, a corporation's business will be considered to have been carried on in Canada if at least 50% of its employees are engaged in the business in Canada or at least 50% of its salaries or wages are paid for services provided in Canada in respect of the business. If the corporation is part of a group of related corporations, the combined services of their employees and the combined salaries and wages paid must be considered in making this determination. ... Due to the detail and complexity of the Regulations regarding these issues, the foregoing comments are meant only to provide an overview of the relevant provisions and under no circumstances are they to be considered to be either comprehensive or all inclusive. ...

Active Business Income This is in reply to your letter of September 1, 1993, wherein you requested our opinion on whether a corporation's royalty income would be considered "income from a source that is property" or "income from an active business" for the purposes of subsection 129(4.1) and paragraph 125(7)(a) of the Income Tax Act (the "Act"). ... Such rights are considered "property" within the meaning assigned by the definition of the term under subsection 248(1) of the Act. ... If that is the case, the royalty income from such business is considered income from a source that is a property by virtue subsection 129(4.1) and paragraph 125(7)(a) of the Act. ...

There are two separate rules for determining whether a property is considered under the Act to be used in the course of carrying on the business of farming in Canada. ... Whether a particular taxpayer's operation is considered to be the carrying on a business of farming is a question of fact that can only be determined after a review of all the facts at a particular time. ... We also wish to advise that the preceding comments should not be considered as an expression of opinion that your property constitutes a qualified farm property. ...

(b)An award of special and general damages described in paragraph 2 of IT-365R2 which are decreed to be paid in periodic payments is not considered to be an annuity contract for the purposes of sections 12.2 and subsection 56(1) of the Income Tax Act (the Act) and the periodic payments are not considered to be annuity payments for the purposes of the Act (see paragraph 3 of IT-365R2). Accordingly, such periodic payments are considered to be non-taxable. ... On the other hand, where an annuity contract can be considered to have been purchased with the proceeds of a lump sum award, the annuity payments will give rise to income on the assumption that paragraphs 81(1)(g.1) and (g.2) of the Act are not relevant. ...

In your view, the employer, should be considered to be resident on a reserve as the central management and control of the employer as a corporation is exercised on the reserve by its board of directors. ... The central management and control of an organization is usually considered to be exercised by the group that performs the function of a board of directors of the organization. ... Where an organization which would otherwise not be considered to be resident on reserve is asserting that it satisfies the definition because it holds its board of directors meetings on reserve, it should generally be considered to satisfy the definition where management and control over the organization is legitimately exercised during those meetings. ...

In our view, where a property is a capital property, in the absence of plans to proceed with the development of a subdivision, making application to the relevant authority for approval of a plan to subdivide would not, in and by itself, cause the property to be considered as being converted to inventory. Where this is the case, the entire amount of a forfeited deposit would be considered capital in nature and a capital gain on the forfeiture would be realized in the year received. ... The taxpayer would have a notional capital gain on the date of conversion which would not be considered to give rise to taxable capital gains until the year in which the lots were actually sold. ...