Consider each of the following unrelated cases, involving the ownership of the common shares of Canadian-controlled private corporations, for taxation years of all corporations ending on December 31:
(A) Leah Ltd. owns 55% of the shares of Elaine Ltd.
(B) Ms. Miriam owns 51% of the shares of Abigail Ltd. and 60% of the shares of Ethan Ltd.
(C) Ms. Irene and Mr. Mordechai each own 50% of the shares of Clare Ltd. In addition, they each own 50% of the shares of Philip Ltd. Ms. Irene and Mr. Mordechai are not related.
(D) Mrs. Lyn owns 60% of the shares of Jay Ltd. and Mrs. Sarah own the other 40%. Mrs. Lyn and Mrs. Sarah each own 50% of the shares of Alex Ltd. Mrs. Lyn and Mrs. Sarah are not related.
(E) Janna Ltd., Rayna Ltd. and Adam Ltd. each own V3 of the shares of Stan Ltd. Janna Ltd. and Rayna Ltd. each own 50% of the shares of Jonathan Ltd.
(F) Ms. Ruth owns all of the shares of Rick Ltd. Ms. Ruth owns 25% of the shares of Daniel Ltd. and Ms. Ruth's daughter, Elana, who is over 18 years old owns the other 75%.
(G) Mr. Joshua owns 100% of the shares of Gord Ltd. and Ms. Dahlia owns 100% of the shares of Rosalyn Ltd. Mr. Joshua and Ms. Dahlia each own 30% of the shares of Rebecca Ltd. The other 40% of the shares of Rebecca Ltd. are owned by strangers. Mr. Joshua is the brother of Ms. Dahlia's husband.
(H) Mrs. Yael owns 60% of the shares of Benjamin Ltd. and 30% of the shares of Livi Ltd. Another 25% of the shares of Livi Ltd. are owned by Benjamin Ltd. and the remaining 45% of the shares of Livi Ltd. are owned by strangers.
(I) Ms. Daniella owns 60% of the shares of Elizabeth Ltd. and 25% of the shares of Ava Ltd.
Mr. Adam, who is not related to Ms. Daniella, owns the other 75% of the shares of Ava Ltd. Ms. Daniella holds an option to buy all of the shares owned by Mr. Adam at any time in the next 10 years.
(J) Mr. and Mrs. Jonathan each own 50% of Ethan Ltd. Mr. Jonathan and his two brothers and one sister each own 25% of Maya Ltd.
In each of the above unrelated cases determine whether the corporations are associated. Substantiate your answer by reference to the specific conditions in the provisions of section 256, and consider all possible alternatives.
This question was answered on: Jul 11, 2017
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