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.
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Attention: XXXXXXXXXX
Dear Sirs:
RE: Family Farm Property
This is in reply to your letter of February 23, 1993 in which you requested an advance income tax ruling confirming that the farm property presently held by you and your wife constitutes Qualified Farm Property within the definition contained in subsection 110.6 (1) of the Income Tax Act (the "Act") for purposes of the Enhanced Capital Gains Deduction provided in subsection 110.6 (2) of the Act.
As indicated in paragraphs 3 and 6 of Information Circular 70-6R2, advance income tax rulings are only issued in respect of proposed transactions. Since the matter on which you requested us to rule is not a specific proposed transaction, we regret that we are unable to provide you with the ruling requested. However, we are prepared to provide you with a non-binding opinion which should serve your purpose.
Our understanding of the facts of your situation is as follows:
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Based on the foregoing, in our opinion, provided a farming business was carried on for at least five years by your father and the property in question was primarily used in that farming business, the property would fall within the definition of Qualified Farm Property and consequently both you and your wife would be eligible to claim the enhanced capital gains Deduction against any capital gains which could result in the event of a sale. The questions of whether a farming business was carried on and whether the property was primarily used in that business are questions of fact, which are usually reviewed by officials of the local District Taxation Office, who are in a better position to appreciate all the circumstances of a particular case. We suggest that any claim for the enhanced capital gains Deduction be based on your knowledge of the facts and that you retain any documentation you may have in support of the facts, pending possible review by the District Office.
Your deposit of $400 will be refunded to you under separate cover.
In accordance with the comments in paragraph 21 of Information Circular 70-6R2, the foregoing comments are not binding on the Department. Nevertheless, we trust they will be useful to you.
Yours truly,
E. Wheeler for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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© Her Majesty the Queen in Right of Canada, 1993
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© Sa Majesté la Reine du Chef du Canada, 1993
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