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 CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues: Must the expected profit from a tree farm materialise within a taxpayer's life expectancy
Position: Yes
REASON:
November 29, 2001
North Bay Tax Services Office HEADQUARTERS
Guy Rocheleau Jacques E. Grisé
957-2059
2001-009687B
Losses from Farming Activities
This is in reply to your e-mail of October 26, 2001, concerning our memorandum to you of October 23, 2001 (our previous memorandum) on losses from farming activities.
Our previous memorandum stated, in part, the following:
"Where a woodlot's marketable product can only be created at the end of a time period that is beyond the life expectancy of a taxpayer, the woodlot business itself cannot be expected to generate a profit for the taxpayer. It seems that the above factor would be a crucial factor in determining a reasonable expectation of profit of a taxpayer under such circumstances."
You are asking for a reference that you can quote for the statement made in the first sentence. The sentence represents our analysis of the last part of paragraph 7(g) of Interpretation Bulletin IT-373R2, Woodlots, as it applies to the situation that was being contemplated. To our knowledge, there is no court case that deals specifically with the above matter.
John Oulton, CA
Manager
Business and Individual Section
Business and Partnerships Division
Income Tax Rulings Directorate
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