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.
REVENUE CANADA ROUND TABLE CTF - Nov. 1992
Question #36
CAPITAL GAINS EXEMPTION - QUALIFIED FARM PROPERTY
Section 110.6 defines "qualified farm property". One requirement for property acquired on or before June 18, 1987, is that the property be used by the individual principally in the course of carrying on the business of farming in Canada in the year the property was disposed of by the individual. Does the fact that a taxpayer has been claiming restricted farm losses since the inception of the farm (without objection from Revenue Canada) preclude him from claiming the $400,000 capital gains exemption on qualified farm property?
Answer:
As indicated in paragraph 1(b) of the interpretation bulletin IT-322R , a taxpayer whose chief source of income is not farming nor a combination of farming and some other source of income may still carry on a farming business. Accordingly, the farm property acquired on or before June 18, 1987 will not be precluded from meeting the definition of "qualified farm property" in subsection 110.6(1) of the Act on the basis that the taxpayer has been subject to the "restricted farm loss" provisions of section 31 of the Act.
Officer: Jean-Pierre Simard File number: 0-922846 October 16, 1992 Applicable sections of the Act: 110.6(1) "Qualified Farm Property", 31(1)
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