CRA indicates that idle forest land could cause a property to not qualify as a qualified farm or fishing property

Can the “used principally” requirement in s. 110.6(1.3)(a)(ii)(A)(II) (potentially relevant to a property qualifying as a “qualified farm or fishing property” for capital gains deduction purposes) be met where an individual owns a 70 acre parcel of land of which 25 acres is workable farmland and 45 acres is forest?

CRA indicated that where in a particular year, more than 50% of a particular property is being used for some purpose other than farming (or fishing) or is otherwise vacant or idle, generally speaking, such non-farming use would result in the entire property not being considered as being used principally in the business of farming in Canada for the year. However, if the unusable portion was not suitable for any use, then it may be excluded from the “used principally” determination.

Neal Armstrong. Summaries of 13 June 2023 External T.I. 2021-0891701E5 under s. 110.6(1.3)(a)(ii)(A)(II) and s. 248(1) - property.