C. Advise Healthy Bites Ltd. as to the recommended course of action (rath A ur u. AP 14-3 (Associated Corporations) The following situations are independent of each other. All of the corporations involved are CCPCs and have only one authorized class of shares. A. Circle Ltd. owns 51% of the shares of Loop Ltd., which in turn owns 51% of the shares of Ring Ltd. 8. Gerald Stone owns 75% of the shares of Rock Ltd. and 85% of the shares of Boulder Ltd. C. The percentage share ownership of Jukebox Ltd. and Vending Ltd. are as follows: None of the individuals are related to each other. D. Rainer Gosling owns 100% of the shares of Fowl Ltd. Beatrice Owlet, Rainer's sister, owns 100% of the shares of Capon Ltd. Rainer, Beatrice, and their mother and father each own 25\% of the shares of Pullet Ltd. E. Ryan McLain owns 62% of the shares of McLain Ltd. and 40% of the shares of Chatelaine Ltd. McLain Ltd. owns 18% of the shares of Chatelaine Ltd. F. Melissa Andrews owns 75% of the shares of Andrews Ltd. and 25% of the shares of Statler Ltd. Jeremy Statler, Melissa's brother, owns 75% of the shares of Statler Ltd. and 25% of the shares of Andrews Ltd. Required: For each of the preceding stuations, indicate whether the conporations uns and explain your conclusion with reference to the 17A. In (c) each of the corporations was controlled, directly or indirectly in ary mannor whecting by (d) one of the corporations was controlled, directly or indirectly in ary marner whateves by the other corporation, and that perscrewned, in respect of the other corporason, net 25 percent of the issued shares of any class, other than a speofied class, of the capital stock thereof; or (e) each of the corporations was controlled, directly or indirectly in any munner whithes by the members of the other related group, and one or more persons who were rembing less than 25 percent of the alone or togothec, owned, in respect of each corpontion sut capital stock thereof. AP 14-4 (Associated Corporations) Each of the following is an independent case involving the ownership of voting sharas of cora. All of the corporations have taxation years that end on December 31 and have only one autocad class of shares. A. Mr. Bond owns 55% of Samen inc. Samen Inc. Owns 40% of Bano Lid. Mr. Bond alse ows 14% of Hax Ltd., Which in turn owns 54% of the shares of Bano Lid. Mr. Bons's 10 yearde daughter owns 6% of the shares of Barro Ltd. B. Mr. Jones, Mr. Knight, and Mr. Long are three unrelated individuals. - Mr. Jones owns 50% of the shares of Anix Inc. and 25% of the shares of Brex lad - Mr. Knight owns 50% of the shares of Brex Lid. - Mr. Long owns 50% of the shares of Anix lnc. and 25% of the shares of Brex Lit C. Sam Scully owns 60% of Scully Inc. His sistec, Susan Wison, owns 80\% of Wison Las and 30% of Scully Inc. Sam Scully also owns 10% of Wison Ltd. D. Joan and Sarah Lartch are sisters. Joan owns 100% of the shares of JL Inc. and 31% dr tre shares of Meadow Ltd. Her sister Sarah owns 60.

1. C. Advise Healthy Bites Ltd. as to the recommended course of action (rath A ur u. AP 14-3
(Associated Corporations) The following situations are independent of each other. All of the
corporations involved are CCPCs and have only one authorized class of shares. A. Circle Ltd.
owns 51% of the shares of Loop Ltd., which in turn owns 51% of the shares of Ring Ltd. 8.
Gerald Stone owns 75% of the shares of Rock Ltd. and 85% of the shares of Boulder Ltd. C. The
percentage share ownership of Jukebox Ltd. and Vending Ltd. are as follows: None of the
individuals are related to each other. D. Rainer Gosling owns 100% of the shares of Fowl Ltd.
Beatrice Owlet, Rainer's sister, owns 100% of the shares of Capon Ltd. Rainer, Beatrice, and
their mother and father each own 25% of the shares of Pullet Ltd. E. Ryan McLain owns 62% of
the shares of McLain Ltd. and 40% of the shares of Chatelaine Ltd. McLain Ltd. owns 18% of
the shares of Chatelaine Ltd. F. Melissa Andrews owns 75% of the shares of Andrews Ltd. and
25% of the shares of Statler Ltd. Jeremy Statler, Melissa's brother, owns 75% of the shares of
Statler Ltd. and 25% of the shares of Andrews Ltd.
Required: For each of the preceding stuations, indicate whether the conporations uns and explain
your conclusion with reference to the 17A. In (c) each of the corporations was controlled,
directly or indirectly in ary mannor whecting by (d) one of the corporations was controlled,
directly or indirectly in ary marner whateves by the other corporation, and that perscrewned, in
respect of the other corporason, net 25 percent of the issued shares of any class, other than a
speofied class, of the capital stock thereof; or (e) each of the corporations was controlled,
directly or indirectly in any munner whithes by the members of the other related group, and one
or more persons who were rembing less than 25 percent of the alone or togothec, owned, in
respect of each corpontion sut capital stock thereof. AP 14-4 (Associated Corporations) Each of
the following is an independent case involving the ownership of voting sharas of cora. All of the
corporations have taxation years that end on December 31 and have only one autocad class of
shares. A. Mr. Bond owns 55% of Samen inc. Samen Inc. Owns 40% of Bano Lid. Mr. Bond
alse ows 14% of Hax Ltd., Which in turn owns 54% of the shares of Bano Lid. Mr. Bons's 10
yearde daughter owns 6% of the shares of Barro Ltd. B. Mr. Jones, Mr. Knight, and Mr. Long
are three unrelated individuals. - Mr. Jones owns 50% of the shares of Anix Inc. and 25% of the
shares of Brex lad - Mr. Knight owns 50% of the shares of Brex Lid. - Mr. Long owns 50% of
the shares of Anix lnc. and 25% of the shares of Brex Lit C. Sam Scully owns 60% of Scully Inc.
His sistec, Susan Wison, owns 80% of Wison Las and 30% of Scully Inc. Sam Scully also owns
10% of Wison Ltd. D. Joan and Sarah Lartch are sisters. Joan owns 100% of the shares of JL Inc.
and 31% dr tre shares of Meadow Ltd. Her sister Sarah owns 60% of the shares of SL Inc., with
the marrannt 40% of the shares held by her mother. Sarah also owns 39% of the shares of

2. Meadow Lad The remaining shares of Meadow Ltd. are held by an unrelated person. John and
May Carp each own 30% of the shares of Jomay Inc. Serge and Beth Cap each ow 45% of the
shares of Besa Ltd. John and Serge Carp are brothers. Beth Carp owns 40% of ted shares of
Jomay Inc. and May Carp owns 10% of the shares of Besa Lid. equired: For each of the
preceding cases, determine whether the corporations are asspcand upport your conclusions with
references to specific provisions of ITA 256 . In ordar 10 assiatyou in iswering this question, we
have provided you with the content of IIA 256(11. ITA 256(1) Associated corporations-For the
purposes of this Act one corporition is associated with another in a taxation year if, at any time in
the year.
(a) one of the corporations controlled, directly or ina (b) both of the corporations were
controlledy or indirectly in any manner whatever, the other: a person and the person who so
controlled one of the corporations wanner whatever, by person who so controlled the each
corporation, not stock thereof; the issued shares of any clas, in wespect of specified class, of the
corporations was controlled, directly or indirectly in any man a (d) one of the corporations was
related to each member of a group in any manner whatever, by a person and ther corporation,
and that person owned, in respect of the persons that so controlled the other 25 percent of the
issued shares of any class, other the other corporation, not less (e) each of the corporations was
controlled, directly or indirectly in any manner whatever, by a related group and each of the
members of one of the related groups was related to all of the members of the other related
group, and one or more persons who were members of both related groups, 25 percent of the
issued shares of, owned, in respect of each corporation, not capital stock thereof.