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.
XXXX R.B. Day (613) 957-2136
MAR 21 1986
Dear XXXX
We are writing with respect to your submission concerning the manufacturing and processing profits deduction and XXXX.
We have reviewed our position as set out in paragraph 9 of Interpretation Bulletin IT-145R , relative to the arguments set out in your submission. Our comments in this regard are as follows:
Although farming is an excluded activity for purposes of section 125.1, the Department recognizes that farm corporations may carry out certain activities which, if carried out by a taxpayer who was not engaged in the business of farming, would be considered to be the processing of farm products rather than farming. Consequently, the Department adopted the administrative practice that a farm corporation would be entitled to the manufacturing and processing profits deduction in cases where these processing activities were segregated into a distinct business which was separate from its farming activities and provided that the income from the processing business was reported on the accrual basis.
As a result of our review of this matter, the Department now accepts that a farm corporation will be entitled to the manufacturing and processing profits deduction in cases where the processing activities are not segregated into a separate business provided there is a clear delineation between the farming activities and the processing activities and this is evidenced in the records of the company. It will, however, still be necessary to determine whether any activities carried out by a farm corporation do, in fact, qualify as processing activities.
Should you require further information or explanations with respect to the above, please contact the writer.
Yours truly,
for Director Small Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch
c.c. Mr. Pat Binns, M.P.
Mr. Richard Labelle Special Assistant to Minister of National Revenue
Mr. Brian Dawe Director Charlottetown District Office
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© Her Majesty the Queen in Right of Canada, 1986
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, 1986
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