Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
May 11, 2000
XXXXXXXXXX
Dear XXXXXXXXXX:
The Honourable Martin Cauchon, Minister of National Revenue, has asked me to reply to your correspondence addressed to the Honourable Paul Martin, Minister of Finance, concerning a report entitled Proposal for the Fair Income Taxation of Horse Racing Mr. Martin sent a copy of your correspondence to Mr. Cauchon on March 2, 2000.
As you know, the report was forwarded to us because of your suggestion that the government develop an interpretation bulletin to provide guidance to the horse racing industry on the reasonable expectation of profit test.
Over the years, a number of interpretation bulletins have been developed that deal with specific income tax issues for farmers. Since the definition of farming in the Income Tax Act includes the maintaining of horses for racing, these bulletins are designed to apply generally to all types of farming operations. The Canada Customs and Revenue Agency also publishes an annual guide entitled Farming Income, that describes how various types of farm losses (including those denied because of the application of the reasonable expectation of profit test) are treated on a farmer's annual income tax return. A copy of that guide is attached for your information.
There is currently an interpretation bulletin, IT-322R, Farm Losses, that deals with the restricted farming losses under section 31 of the Act. As well, paragraph 4 of this bulletin has a discussion of the reasonable expectation of profit test, which reflects the CCRA's views for all types of farming operations. These comments were developed based on jurisprudence and are currently used by the Audit Division of our tax services offices when a taxpayer's farming operation is reviewed. I have also attached a copy of this interpretation bulletin for your perusal.
The CCRA's publications can also be found on our Internet site at
www.ccra-adrc.gc.ca.
I trust that my comments will be of assistance.
Your sincerely,
Bill McCloskey
Assistant Commissioner
Policy and Legislation Branch
Attachments
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 2000
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 2000