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.
August 21, 1991
Dear Sirs:
Re: Qualified Farm Property
This is in reply to your letter of June 18, 1991 wherein you request our views regarding the availability of the enhanced capital gain exemption in respect of qualified farm property. You describe the following situation.
1.
2. 24(1)
3.
Our Comments
The fact situation which you set out is quite specific and it appears that it may relate to definite contemplated transactions by specific individuals. Assurance as to the tax consequences of contemplated transactions can only be given in response to a request for an advance income tax ruling. If you wish to obtain any binding commitment with respect to an actual case with facts similar to your example, an advance income tax ruling application should be submitted. Information Circular 70-6R2 describes the guidelines respecting advance income tax ruling applications. If, on the other hand, your situation reflects factual historic occurrences, the determination with respect to entitlement to the capital gains deduction under subsection 110 6(2)
Income Tax Act (the "Act") would generally be carried out by personnel from your local District Taxation Office. We do, however, provide the following comments for your information.
Subsection 110.6(2) of the Act provides, to individuals a deduction of up to $500,000) for capital gains realized on the disposition of qualified farm property. The definition of qualified farm property in subsection 110.6(1) of the Act requires that the real property must be used in carrying on a farming business in Canada by one of the eligible users described in subparagraphs (a)(i) to (v). One of the eligible users is a parent of the taxpayer. Paragraph 252(2)(c) of the Act modifies for purposes of the Income Tax Act the meaning of the word parent to include a mother-in-law and father-in-law.
24(1)We trust this will be of assistance to you.
Yours truly,
for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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© Her Majesty the Queen in Right of Canada, 1991
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© Sa Majesté la Reine du Chef du Canada, 1991
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