Ms. Julie Robinson was born in Vancouver in 1976, was educated in Waterloo, and has lived and worked in Canada all of her life. Until mid-July 2023, she had been senior vice-president of Waterloo Debits Manufacturing Limited (Waterloo Debits).

Effective July 15, 2023, Ms. Robinson was promoted to president of the corporations wholly owned subsidiary in Mexico, Mexican Credits Mfg. Ltd., and was paid by that corporation from that date. No definite term was placed on her contract with the Mexican subsidiary. Ms. Robinson is generally regarded as the leading candidate for the office of president of Waterloo Debits when the incumbent retires within the next several years.

Ms. Robinson left Canada on July 15, 2023 to take up her new position in Mexico. One of her two minor children stayed in Canada to complete his final year of high school, which was beginning in the fall of 2023. He stayed with one of the Robinsons two married children who remained in Canada. The other unmarried minor child left with her mother for Mexico. Mr. Robinson stayed in Canada until August 31, 2023, when the sale of the Waterloo house closed, and while he arranged to conduct his international consulting practice from the Mexican home.

The Robinsons did not sell their cottage in Grand Bend, Ontario, on Lake Huron, but they did enter into a long-term agreement with a realtor to have the cottage rented during the winter ski season and the summer vacation period, except for the first two weeks in August each year, beginning August 2024, when they intended to vacation there with their family.

In Mexico, Ms. Robinson rented an unfurnished house which was smaller than their Waterloo house. She rented some basic furniture for the short period to September 2023 when most of her furniture from Waterloo was moved. The Robinsons left some of the furnishings from their Waterloo home with their married children for their use. Title to this property was not formally changed, but the Robinsons had listed this property in their wills as being transferable to these children on death. These children both had guest rooms in their homes which the Robinsons and their unmarried children could use whenever they chose to.

The Robinsons maintained their portfolio of investments in Canada with the Canadian broker that they had always used. They did this because of their lack of confidence in other financial markets. Ms. Robinson also decided to maintain her accumulated pension credits with Waterloo Debits, rather than transfer them to the Mexican corporations pension plan. However, she did join the Mexican companys plan for services after July 15, 2023. The Robinsons closed all of their bank accounts, except for one necessary for the running of the Waterloo household until August 31, 2023, at which time this account was also closed. They had funds transferred to a new account for the maintenance of the remaining unmarried child while he was in school. Ms. Robinson terminated her Canadian health and car insurance and her business and social club memberships, except for one business club, which she retained on a non-resident basis, effective July 15, 2023. They sold one car on July 15, 2023, and the other one on August 25, 2023, but Ms. Robinson kept her Canadian drivers licence in force.

The Robinsons and the unmarried child who moved with them spent about two weeks in Canada during the December 2023 holiday period visiting with the other children. In addition, they planned a two-week vacation in August in 2024 and thereafter.

Required:

The Robinsons are concerned about how to file their tax returns for 2023. Prepare an analysis for the tax person in your firm who will advise them on the income tax consequences of these facts. Evaluate in detail the alternatives in the residence issue as they relate to this fact situation for the year 2023. Discuss each possible degree of residence and its general tax consequences. State your conclusion on this case after weighing the relevance of the facts considered.