Livestock producers in Alberta’s Peace River region who were forced to sell their livestock after a severe drought are now eligible for a federal livestock tax deferral.
The tax deferral allows eligible producers in the designated areas to defer income tax on the sale of breeding livestock for one year to help replenish breeding stock in the following year.
Proceeds from deferred sales are included as income in the next tax year, when they may be at least partially offset by the cost of reacquiring breeding animals.
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To defer income, the breeding herd must have been reduced by at least 15 percent.
Thirty percent of the income from net sales can be deferred if the breeding herd has been reduced at least 15 percent.
In cases where the herd has been reduced by more than 30 percent, 90 percent of income from net sales can be deferred.
“These tax deferrals will help farmers by increasing the money available to replenish their breeding stock for the following year,” said federal agriculture minister Gerry Ritz.
Alberta provincial agriculture minister Jack Hayden said the federal tax deferral program automatically activates in drought conditions, especially when cattle feeders have a difficult time finding livestock feed.
“The situation in the Peace with feed for the livestock industry is a serious situation this year.”
Hayden said the tax deferral program is one more tool that may help livestock producers stay in business.
It’s a way producers have of reducing their herd this year and rebuilding it next year without being penalized, he added.
The preliminary designated Alberta tax deferral areas are:
•Birch Hills County
•Clear Hills County
•County of Northern Lights
•Grande Prairie County No. 1
•Improvement District No. 12
•Municipal District of Big Lakes
•M.D. of Fairview No. 136
•M.D. of Greenview No. 16
•M.D. of Peace No. 135
•M.D. of Smoky River No. 130
•M.D. of Spirit River No. 133
•Northern Sunrise County
•Saddle Hills County
•Woodlands County
•Yellowhead County
