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: Qualified Farm Property
This is in reply to your letter of April 1, 1993 in which you request our interpretation of clause 110.6(1)(a)(vi)(B) of the Income Tax Act (the "Act") under the definition of "qualified farm property".
It appears that your enquiry relates to specific transactions, either proposed or completed. Where a transaction is proposed, confirmation of the tax implications arising therefrom should be sought by way of an advance ruling request submitted in the manner set out in Information Circular 70-6R2. Where a completed transaction is involved, the enquiry should be addressed to the relevant District Taxation Office. We offer, however, the following general comments.
Pursuant to clause 110.6(1)(a)(vi)(B) of the Act, a real property is considered to have been used in the course of carrying on the business of farming in Canada where the property was used by a corporation referred to in subparagraph 110.6(1)(a)(iv) of the Act principally in the course of carrying on the business of farming in Canada throughout a period of at least 24 months during which time an individual referred to in any of subparagraphs 110.6(1)(a)(i) to (iii) was actively engaged on a regular and continuous basis in the farming business in which the property was used.
In our view, a real property rented by an individual throughout a period of at least 24 months to a corporation, a share of the capital stock of which is a share of a family farm corporation of the said individual, at the determination time, would be a property used by a corporation referred to in subparagraph 110.6(1)(a)(iv) of the Act for the purposes of clause 110.6(1)(a)(vi)(B) of the Act.
The above comments reflect an expression of opinion only and are not binding on the Department, as explained in paragraph 21 of Information Circular 70-6R2. We trust, however, that they are of assistance.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate
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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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