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.
Alberta CICA Roundtable
May 18, 1995
Question 14, Grazing Cooperatives
We suggest that the (a) segment of the answer be revised to read as follows:
a. The $500,000 Capital Gains Exemption
The $500,000 capital gain exemption relates to qualified gains such as shares in a family farm corporation, a qualified small business corporation or qualified farm property. Shares held in a grazing cooperative come under the rules of section 136 whereby the cooperative is not a private corporation except for purposes of sections 15.1, 125, 125.1, 127, 127.1, 152, 157 and paragraph 39(1)(c) of the Income Tax Act. Consequently these shares cannot be QSBC shares. Nor would they be shares of a family farm corporation because the cooperative in not a family farm corporation which is carrying on a farming business in Canada.
Subsection 110.6 provides that real property owned by an individual, in certain circumstances, may be qualified farm property. However, the shares in the cooperative only allow the taxpayer to pasture cattle on land and do not convey ownership in the real property to the taxpayer.
A disposition of these shares would be subject to the general rule with respect to the capital gains exemption. Note that this exemption was phased out effective February 22, 1994.
Note: The changes have been made in italics. We suggest that these changes be made in order to clarify the Department's position.
A.M. Brake
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