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.
923013
XXXXXXXXXX A. Payette
(613) 957-8953
Attention: XXXXXXXXXX
December 2, 1992
Dear Sirs:
Re; Definition of Farming
This is in reply to your letter of September 29, 1992, wherein you requested our interpretation as to whether or not certain activities will constitute "farming" as defined in subsection 248(1) of the Income Tax Act (the "Act"). Specifically, you ask whether providing a horse with the necessary training and exercising program in order that it may compete as a show jumper would be considered farming.
Our comments
Farming as defined in subsection 248(1) of the Income Tax Act, as you point out, includes, among other things, livestock raising or exhibiting and maintaining of horses for racing. Livestock is defined in the Oxford English Dictionary to mean "domestic animals generally; animals of any kind kept or dealt in for use or profit". The term "profit" in this context is intended to mean that there must be a reasonable expectation that the keeping or dealing in animals will gain or produce income.
Hence, the activity of "raising, training and exercising a horse" in order that it may compete as a show jumper could be considered as "farming".
Whether or not a particular taxpayer is in the business of farming, or in any business at all, is a question of fact that can only be determined after all the facts relevant to a particular situation are examined.
We enclose herewith for your reference a copy of Interpretation Bulletin IT-322R which deals with the deductibility of farm losses and discusses some of the criteria of a farming business.
We trust our comments will be of assistance.
Yours truly,
P.D. Fuoco
for Director
Business and General Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch
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© Her Majesty the Queen in Right of Canada, 1992
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© Sa Majesté la Reine du Chef du Canada, 1992
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