Incorporating a farming partnership can be beneficial for several reasons, including the potential to benefit from using the partners’ capital gains exemptions with proper tax planning. For farmers who operate as sole proprietors, there is no need to worry, as it is often possible to restructure your proprietorship into a partnership with your spouse, a […] Read more
Michael Deobald
Stories by Michael Deobald
Discretionary family trust can be beneficial for farmers
Many farmers may have heard about the “tax rollover” rules and the capital gains exemption rules in the Income Tax Act. If applicable, these rules may create beneficial tax positions when a person transfers shares of a farming corporation to their child or to a third party. Their use depends on whether certain conditions are […] Read more
Tracking the history of farming property is important
The Income Tax Act contains advantageous rules that are specific to farmers. Two of the most well known are: The intergenerational rollover that allows parents to transfer certain qualifying farm property to their children on a tax-free basis. The $1 million lifetime capital gains exemption that can be used to offset a capital gain that […] Read more
Beneficial tax rules still exist — at least for the time being
Most business owners have heard of the capital gains exemption. It allows farmers and other business owners to sell shares of their corporation, and farmland that has been actively farmed, without paying tax on capital gains of up to $1 million ($913,000 for non-farming businesses). This is a significant tax benefit, but: What if you […] Read more
Excess cash can be tax problem for farming corporations
Having lots of cash is never a bad thing and can sometimes be hard to imagine after a very challenging year like 2021. However, for the purposes of the Income Tax Act, having too much cash inside of a farming corporation can be a problem and can result in the loss of certain tax benefits. […] Read more
Transferring the farm to the kids now has new tax rules
Business owners often look to sell their businesses when they retire. With farming, the new business owners are often one or more children. This has historically been a problem from a tax perspective. If the parents operate their business through a corporation, the sale of the business will usually proceed by selling the assets of […] Read more
Unanimous shareholders’ agreements help succession
An often-overlooked component of a business owner’s estate plan is a unanimous shareholders’ agreement. A USA can be a useful tool for estate planning purposes, especially in the context of the succession of a family farming corporation. Generally, a USA is an agreement that governs the conduct of a corporation and its shareholders. USAs can […] Read more
Transferring the farm to the kids is tax free – or not
Many farmers know there are “tax rollover” rules in the Income Tax Act that allow their farmland and shares in their farming corporation to be transferred to their children without tax. However, these rules have many conditions that can catch people by surprise. First, some background. Property that can create a capital gain or loss […] Read more
