Tamara Quist is a 36-year-old Canadian citizen, and the only

Tamara Quist is a 36-year-old Canadian citizen, and the only daughter of Bob and Linda Quist. Tamara is the president and sole owner of all 100 common shares of Quist Tires (“QT”), a successful retailer of Michelin Tires located in north Toronto. Tamara’s father, Bob, incorporated QT in Canada about 20 years ago. Tamara took over the business upon finishing university about 12 years ago.

Tamara lives in a downtown Toronto condominium. She owns a portfolio of stock investments of companies listed on both the TSX and NASDAQ. She also has a self-directed registered retirement savings plan (RRSP).

In January of 2018, Tamara went to the Cayman Islands for a vacation and met the man of her dreams, Frank Smeltzer. Frank, a U.S. citizen, had lived in the Cayman’s since 2015 when he moved there from the United States. Frank is the sole shareholder and president of a small U.S. incorporated entity, Smeltzer Jewels (SJ). SJ distributes Colombian-purchased emeralds to U.S. jewellers. Frank’s company has two employees living in New Jersey (a sales agent and a purchasing manager). The corporation is considered a resident of the United States for U.S. tax purposes. Tamara and Frank were married on the beach in the Cayman Islands on January 10, 2018.

Activity
Location
Days
(including weekends)
Work from Cayman home office
Work from Cayman home office
Cayman Islands
Cayman Islands
10 (pre-January 15)
3 (post-January 15)
Work from home office
Canada
247
Vacation
Canada
24
Business trips
United States
38
Vacation
United States
5
Business trips
Colombia
20
Vacation
Cayman Islands
9

Tamara and Frank sold the condominium and furniture and moved to the Cayman Islands permanently on February 18, 2019. Tamara continued to manage QT from the home in the Cayman’s and received employment income from the company after the move. She visited the company and her parents in Canada once a month and expects to spend a total of 95 days in Canada in 2019. The directors of the company held their 2019 annual meeting in the Caymans in early May. Tamara kept a car at her parents and retained her Canadian driver’s license. She closed her bank account when she left Canada and opened a new one in the Cayman Islands, but kept her RRSP and stock investments.

Required:

(a)  Discuss Frank’s Canadian residency status for tax purposes for 2018. Identify each degree of residence that could apply to him for the year and its tax consequences. State a conclusion once you have assessed all of the facts considered.

(b)  Discuss SJ’s Canadian residency status for tax purposes for 2018 and its tax consequences.

(c)  Discuss Tamara’s Canadian residency status for tax purposes for 2019. Identify each degree of residence that could apply to her for the year and its tax consequences. State a conclusion once you have assessed all of the facts considered.

(d)  Discuss QT’s Canadian residency status for tax purposes for 2019 and its tax consequences.