The Ceasar Family The Ceasars own Ceasar's Undertaking Inc. ("CUI"). CUI owns and operates a number of funeral homes across Ontario and is a private corporation. CUI has been very successful over the years. Cal Ceasar, who is age 62, started the company many years ago and worked long hours in the company for literally decades. Cal started working for a funeral home owned by his uncle. He saved and saved and was finally able to purchase a funeral home of his own. The company has grown exponentially since that time. Cal has recently retired. His wife Julie, age 60, has never really worked in the business. She was a drama professor and also has recently retired. In the early days of CUI, she occasionally helped with large funerals for a day here and there. The Ceasars' eldest child Mark, age 35, is now running the business. He is working long hours, at least 60 per week on average, and often complains that he has no time for his family. The business is growing so Mark expects his workload to only grow. He doesn't think It is likely that either of his younger siblings will ever become involved in the business. Mark has hired a manager which has been a great help. The Ceasars' middle child, Anthony, is 23. Anthony hopes to establish a career as an opera singer (he has a lovely baritone voice). He is currently in his final year of opera studies at the University of Toronto Faculty of Music. He has no interest in working for CUI on a regular basis. He has worked for CUI in the summers during high school and university to help fund his education, probably averaging 35 hours per week for the summer months. The youngest child, Portia, is 16. She doesn't have any interest in the business at this point in time. She has always loved plants and gardening and would like to become a landscape architect. The shareholdings in CUI are as follows: Cal - 1,000 voting preferred shares (1 vote per share), redeemable and retractable at $5,000,000 with a discretionary dividend rate; Cal contributed $100 to CUI for these shares Julie - 1,000 voting preferred shares, (1 vote per share) redeemable and retractable at $5,000,000 with a discretionary dividend rate; Julie contributed $100 to CUI for these shares; she has made no other monetary contributions to CUI Mark - 100 Class A voting common shares Anthony - 100 Class B voting common shares Portia - 100 Class C voting common shares The three classes of common shares are equal in every respect except that dividends can be paid on each class independently. All three classes specify one vote per share. It is estimated that the current fair market value of all the common shares in total is approximately $5,000,000. Each of the children paid $10 to CUI for their shares. Each shareholder purchased their shares with their own money. The total value of CUI is approximately $15,000,000 preferred shares worth $10,000,000 and common shares worth $5,000,000). Approximately 45% of this value is derived from the funeral home real estate with the remaining 55% from the service operations of CUI. The Ceasars want to know the tax implications of paying dividends to each family member. They know there is a tax provision that can prevent income splitting but are not sure of the details and how it would apply in their family situation. Provide a full analysis for each family member.