Tax Referrals for More Livestock Farmers05 December 2012
CANADA - More livestock producers in British Columbia, Alberta, Manitoba, Ontario and Quebec will have financial breathing room to help them cope with the effects of extremely dry growing conditions on forage yields.
Agriculture Minister Gerry Ritz announced that the list of designated areas eligible for tax deferrals has been expanded.
“Our Government understands the difficulties faced by livestock producers due to unforeseen weather and we are acting,” said Minister Ritz. “With this tax deferral, producers in another 34 drought-affected municipalities will be able to redirect money towards restocking next year.”
The tax deferral allows eligible producers in designated areas to defer income tax on the sale of breeding livestock for one year to help replenish breeding stock in the following year.
Proceeds from deferred sales are included as income in the next tax year, when they may be at least partially offset by the cost of replacing breeding animals.
In the case of consecutive years of designation, producers may defer sales income to the first year in which the area is no longer designated.
To defer income, the breeding herd must have been reduced by at least 15 per cent. If this is the case, 30 per cent of income from net sales can then be deferred. In cases where the herd has been reduced by more than 30 per cent, 90 per cent of income from net sales can be deferred.
Eligible producers will be able to request this deferral when filing their 2012 income tax returns. Livestock producers are advised to contact their local Canada Revenue Agency Tax Services Office for details on the income tax provisions.
In addition to the tax deferral, producers have access to assistance through existing federal/provincial Business Risk Management programs, such as AgriInsurance, AgriStability and AgriInvest.
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