Is farm income deferral an effective tax management strategy? That depends on whether your farm business is based on grain or mostly on the hoof. There is a bit of an inequity in the tax system that allows more flexibility in deferring income from grain sales than from livestock sales. For example, when listed grains […] Read more
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Income deferral tricky prospect for livestock producers
Leasing land to farm corporation comes with tax implications
A pattern is starting to take shape in how the federal government treats the family farm corporation for taxation purposes. The manner in which income is taken and expenses claimed is much tighter and the potential for audit greater if the regulations aren’t precisely followed. We mentioned in a previous column that the federal finance […] Read more
Feds keep eye on how farms manage leasing expenses
The federal finance department has already indicated that it is taking aim at family farm businesses structured as corporations and the way income removed from the corporations is treated for tax purposes. Payouts to family members are usually most heavily taxed as straight income but to a lesser degree as dividends. The intent of the […] Read more
Watch alternative minimum tax trap when selling farm
Government is a strange beast when it comes to taxes. It provides preferential rates on income from dividends, capital gains or even a qualified farm property lifetime capital gains exemption but if you take advantage of these routes to calculating your taxes, government reserves the right to charge you more taxes just because it can. […] Read more
NAFTA isn’t the only game in town; CPTPP also important
Although the North American Free Trade Agreement is all over the news and the somewhat rocky nature of our relationship with our largest trading partner receives much attention, Canada’s relationship with Pacific Rim countries has opened new doors for the Canadian agriculture sector. With the somewhat awkward title of the Comprehensive and Progressive Agreement for […] Read more
Tax deferral program helps when drought forces herd sale
Farming is frequently exposed to unpredictable acts of nature, which will often affect your financial income in the current year and future ones. Drought and flooding are two such conditions that might force you to sell part of your breeding herd, sometimes at less-than-ideal prices. To help mitigate those losses, the federal government offers a […] Read more
Year-end deadlines are quickly closing in for your RRSP
Certain Canadians may be in for a very expensive tax bill if they don’t act before the Dec. 31 deadline. If you reached the wonderful age of 71 in 2018 and still have funds on deposit in an RRSP, the federal government requires you to wind it up by the end of your 71st year. […] Read more
The new crop on the block — well, legal crop
Recreational cannabis is scheduled to become legal this Canada Day if the prime minister has his way. If that date cannot be met, the federal government has definitely committed to a July implementation. Growing illegal marijuana has a long tradition in Canada, whether as a massive grow op in an abandoned Molson brewery plant outside […] Read more
Continent is on the slow boat to a renegotiated NAFTA
The North American Free Trade Agreement negotiations appear to be moving at a snail’s pace and protection of Canada’s supply-management system for dairy and poultry, which is particularly important to many in the farming community, hasn’t yet played a major part in the talks. Foreign Affairs Minister Chrystia Freeland has consistently said Canada will continue […] Read more
Tax increases in new budget will affect many farmers
The Canadian Income Tax Act turned 100 last year and Canadians can be excused if they didn’t celebrate. Since its introduction in Canada in 1917, it has become a much more complex document and has grown to more than 2,000 pages in length. In 2017, the government signaled its intention to change the tax rules […] Read more
