Chapter History
Disclaimer
We do not guarantee the accuracy of this copy of the CRA website.
Scraped Page Content
Chapter History
S4-F11-C1, Meaning of Farming and Farming Business
Introduction
The purpose of a Chapter History page is to highlight any amendments to the information contained in an interpretation bulletin that is now reflected in a chapter of an income tax folio as well as to identify any subsequent amendments to a folio chapter. It outlines amendments that have been made as a result of legislative changes and proposed legislative changes, precedential court decisions, as well as new or revised interpretations of the Canada Revenue Agency (CRA).
Except as otherwise noted, all statutory references herein are references to provisions of the Income Tax Act, R.S.C., 1985, c.1 (5th Supp.), as amended and all references to a Regulation are to the Income Tax Regulations, C.R.C., c. 945, as amended.
Update November 8, 2016
General
Income Tax Folio S4-F11-C1, Meaning of Farming and Farming Business, replaces and cancels the following:
- ¶4, ¶5 and ¶6 of Interpretation Bulletin IT-322R, Farm Losses;
- ¶13 and ¶14 of Interpretation Bulletin IT-373R2 (Consolidated), Woodlots; and
- ¶8 and ¶9 of Interpretation Bulletin IT-433R, Farming or Fishing - Use of Cash Method.
In addition to consolidating the content of the former paragraphs, general revisions have been made to improve readability. Any substantive technical and interpretive changes to the information outlined in the former interpretation bulletin paragraphs are described below.
Legislative and other changes
¶1.1 (formerly included in ¶13 of IT-373R2) has been expanded to discuss the concepts of appreciable contribution and the whole aspect of commercial production.
¶1.2 (formerly included in ¶6 of IT-322R) has been expanded to describe what is included in the tillage of the soil.
¶1.3 has been added to describe the common, ordinary and generally accepted meaning of farming for income tax purposes.
¶1.4 (formerly included in ¶4 of IT-322R) has been expanded to discuss guidance from other government agencies.
¶1.5 (formerly included in ¶6 of IT-322R and ¶8 of IT-433R) has been expanded to include a reference to tobacco, marijuana, a maple sugar bush, and peat moss.
¶1.6 (formerly included in ¶2 of IT-427R) has been revised to expand on what is considered to be livestock and to provide a reference to Sniderman v The M.N.R., 89 DTC 323 (TCC).
¶1.7 has been added to discuss a food source.
¶1.8 has been added to discuss raising poultry.
¶1.9 and ¶1.10 (formerly included in ¶6 of IT-322R) have been expanded to discuss fish and shellfish raising which may be considered farming.
¶1.13 (formerly included in ¶6 of IT-322R and ¶25 and ¶26 of IT-268R4) has been expanded to discuss more activities excluded from the definition of farming.
¶1.14 (formerly included in ¶10 of IT-433R) has been expanded to include examples of fishing activities.
¶1.15 has been added to explain that farming generally excludes manufacturing and processing.
¶1.16 has been added to discuss the processing of agricultural product and provides some examples.
¶1.17 (formerly included in ¶1 of IT-433R) has been expanded to mention the election to use the cash method to compute income from a farming business.
¶1.19 (formerly included in ¶13 of IT-349R3) has been expanded to include examples of general management and control of a farming operation.
¶1.20 and 1.21 have been added to discuss two Supreme Court of Canada cases (Stewart and Walls). It also describes how a particular operation must be carried out in a sufficiently commercial manner to be considered a business. The reasonable expectation of profit is no longer accepted as the test to determine whether a taxpayer’s activities constitute a source of business income. That test was formerly found in ¶5 of IT-322R.
¶1.22 has been added to discuss separate businesses.
¶1.23 (formerly included in ¶2 of IT-206R) has been expanded to include an example.
¶1.25 and ¶1.26 have been added to discuss incidental activities.
Privacy statement
The information you provide through this survey is collected under the authority of the Department of Employment and Social Development Act (DESDA) for the purpose of measuring the performance of Canada.ca and continually improving the website. Your participation is voluntary.
Please do not include sensitive personal information in the message box, such as your name, address, Social Insurance Number, personal finances, medical or work history or any other information by which you or anyone else can be identified by your comments or views.
Any personal information collected will be administered in accordance with the Department of Employment and Social Development Act, the Privacy Act and other applicable privacy laws governing the protection of personal information under the control of the Department of Employment and Social Development. Survey responses will not be attributed to individuals.
If you wish to obtain information related to this survey, you may submit a request to the Department of Employment and Social Development pursuant to the Access to Information Act. Instructions for making a request are provided in the publication InfoSource, copies of which are located in local Service Canada Centres.
You have the right to file a complaint with the Privacy Commissioner of Canada regarding the institution’s handling of your personal information at: How to file a complaint.
When making a request, please refer to the name of this survey: Report a Problem or Mistake on This Page.
- Date modified:
- 2017-02-08