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: Calculation of Gross Farming Income
Position: Gross income is gross price quoted on cash purchase ticket
Reasons: Consistent with prior opinions
Bob Nawolski
NISA Administration
PO Box 6100 2000-000053
Winnipeg, MB Wayne Antle
R3C 3A4 (613) 957-2102
September 27, 2000
Dear Mr. Nawolski:
Re: Calculation of Gross Farming Income
This is in response to your letter dated December 30, 1999 wherein you request that we reconsider our position expressed in our letter to Sheldon Friesen dated September 22, 1999 (file # 5-991286). We apologize for the delay in responding.
As noted in our earlier correspondence, the Canada Customs and Revenue Agency ("CCRA") has traditionally held the view that gross farming income should be reported based on the gross price quoted on the cash purchase ticket issued when the grain is delivered to the elevator. The farmer can claim deductions for freight, storage, and mandatory levies as expenses in the year paid or payable depending on whether the farmer is using the cash or accrual basis for computing income. In our view, the farmer has incurred expenses for freight, storage and mandatory levies when the farmer receives the cash purchase ticket which was subject to these charges. Accordingly, our position, as expressed in our earlier letter, remains unchanged.
We are unable to comment on the computation of "net eligible commodity sales" for the purposes of the Net Income Stabilization Account ("NISA") program as this determination is relevant only for the administration of the NISA program.
We trust that our comments will be of assistance.
Yours truly
John Oulton.
Business and Publications Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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