20 April 2001 External T.I. 2001-0075145 - BREEDING OF DOGS

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.

Principal Issues: Is dog breeding a farming activity?

Position: Generally, no

Reasons: Jurisprudence

XXXXXXXXXX 	2001-007514
		Cornelis Rystenbil, CGA
April 20, 2001

Dear XXXXXXXXXX:

Re: Breeding of Dogs

This is in reply to your letter of March 15, 2001 in which you ask for our views on whether the breeding of purebred dogs with the intent to earn a profit is considered to be a farming activity under the Income Tax Act (the "Act").

Comments

It appears that the situation described in your letter relates to an actual transaction. Written confirmation of the consequences inherent in particular transactions are given by this directorate only where the transactions are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R4. Where the particular transactions are partially completed or completed, the enquiry should be addressed to the relevant tax services office. However, we are prepared to provide the following comments that are of a general nature. Please also note that the discussion in this reply has been limited to what constitutes farming, and should not be interpreted as indicating that a particular activity constitutes the carrying on of a business (as such a determination is a question of fact which requires a review of all relevant facts of each particular situation).

"Farming" is defined in subsection 248(1) of the Act as including "tillage of the soil, livestock raising or exhibiting, maintaining or horses for racing, raising of poultry, fur farming, dairy farming, fruit growing and the keeping of bees, but does not include an office or employment under a person engaged in the business of farming". In the Howard Partington case (91 DTC 347), the Tax Court found that a dog breeding activity was not farming, indicating: "I am not convinced that the breeding of dogs to be sold as pets and the operation of a kennel are usually understood as being farming activities nor that they may be assimilated to one or the other included activities extending artificially the meaning of farming such as fur farming or horse racing." Accordingly, in our view, the breeding of dogs would generally not constitute farming.

Yours truly,

Milled Azzi
for Director
Business and Partnerships Division
Income Tax Rulings Directorate

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