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Did you know....?


The capital gains deduction on qualified farm property is now $1,000,000.

When you use a large amount of the capital gains deduction in one year.

  • You will still have to pay a "minimum tax" that can be very significant
  • If you are collecting Old Age Pension you will have to pay it back
  • The amount of your child benefit will be reduced or eliminated for the following year

Minimum tax is a refundable tax, paid in the year of a large use of the capital gains deduction, but is refundable over the next seven years from tax you would otherwise owe.

Shares of a qualified farm corporation qualify for the capital gains deduction.

Shares of a qualified farm corporation can roll to the next generation tax free.

That your corporation may not qualify for the capital gains deduction or rollover benefit if more than 10% of its assets are non farm assets at the time of the transfer:

Non farm assets include: land rented out, equipment used more than 50% for custom work, excess cash over the amount needed to operate, the cash surrender value of corporate owned life insurance

Though you may not plan to sell the shares of your corporation, these rules can have an adverse effect on your estate, should it not qualify for the rollover to children or the capital gains deduction at the time of your death

See our article in the Information Center of our website "Do the shares of your Farm Corporation Qualify for the Rollover and Capital Gains exemption" for more information on this topic. www.wheatlandaccounting.com/features/W2014Shares.html