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.
Principal Issues: To determine if a company which harvests peat is in the business of farming.
Position: For purposes of CAISP, income resulting from harvesting peat is considered farming income.
Reasons: RC 4060, Chapter 3
2004-007732
XXXXXXXXXX Luisa A. Majerus, CA
(613) 832-3488
April 7, 2005
Dear XXXXXXXXXX:
Definition of "Farming" - Harvesting Peat
This is in reply to your facsimile dated May 20, 2004, requesting our views on whether harvesters of peat are eligible to participate in the Canadian Agricultural Income Stabilization Program ("CAISP") administered by Agriculture and Agri-Food Canada. Specifically, you are requesting an interpretation of the definition of farming to determine whether or not a taxpayer who harvests peat can participate in the CAISP. In order to be eligible, one of the criteria requires participants to have reported farming income or losses for tax purposes. We apologize for the delay in responding.
Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings, dated May 17, 2002. Where the particular transactions are completed, the inquiry should be addressed to the relevant Tax Services Office. However, we offer the following general comments.
For the purposes of the CAISP, Chapter 3 of the income tax guide RC 4060, "Farming Income and the CAIS Program", explains that income resulting from the sale of a commodity that is an agricultural product, either plant or animal, produced in a farming business will qualify as a farming activity. The guide provides a list of these commodities, which includes "peat moss based sod" and "peat moss". A copy of RC 4060 can be found on the Agricultural and Agri-Food Canada website at www.agr.gc.ca/caisprogram.
Accordingly, it is our view that where a taxpayer generates income from the sale of peat moss based sod or peat moss produced, the taxpayer can participate in CAISP.
We trust this information is helpful.
Yours truly,
John Oulton, CA
Manager
For Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Planning Branch
Cc Mr. Gordon Andrusiak
Canadian Income Stabilization Program
Agricultural and Agri-Food Canada
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 2005
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 2005
Email this Content