Tax Planning for Canadian Farmers
http://www.bdo.ca/library/publications/tax/taxbulletins/092005-2.cfm
Sept 2005 Bulletin
Canadian agriculture is big business. There are hundreds of thousands of farms in Canada with annual cash receipts in excess of $36 billion.
Canadian agriculture is also an industry in transition. The 2001 census indicated that over one-third of Canadian farmers were 55 or older and approaching retirement. At the same time, the trend in Canada is towards larger and fewer farms. Over the next few years, many farmers will be faced with decisions about the future of their farming operations.
As a farmer, you understand these trends well. And when you’re faced with decisions about your future, it’s important to understand the tax implications of the decisions that you will be required to make. That’s why we at BDO Dunwoody LLP have prepared this bulletin — to focus your attention on the tax issues that are important to you so that you can make sound tax and financial decisions as you calculate your annual taxable income and as you look towards your retirement.
This bulletin is divided into two sections. First, we will review annual tax issues you need to consider to ensure that you are minimizing the tax you pay. In the second part of the bulletin, we will look at the unique tax issues that you as a farmer will have to deal with as you approach retirement and either sell your farm or transfer ownership to the next generation.
Note that this bulletin is geared towards farmers whose primary source of income is from farming. If you are a part-time or hobby farmer, many of the ideas discussed may not be appropriate.
