Stackhouse – Tax Court of Canada finds that deductions of losses from a farming business carried on for profit were severely limited because it was a subordinate source of income

Owen J found that the taxpayer’s “farming business has always been subordinate to [her] medical practice as a source of income … and there is no evidence that that will change in the foreseeable future” so that, in light of the amendments to s. 31(1) to overrule Craig, her large farming losses were limited to $17,500 per annum.

Owen J noted that the “[t]here is no evidence that calls into question … that the Appellant pursued her clearly commercial farming activity for profit”, and then stated:

The result in this appeal is most unfortunate. The amended version of the rule has the effect in this case of precluding the operator of a bona fide farming business from deducting losses that would be available to the operator of any other type of business.

Neal Armstrong. Summary of Stackhouse v. The King, 2023 TCC 156 under s. 31(1).