OTTAWA, Ontario – Agriculture and Agri-Food Canada announced Nov. 29 that a list of designated areas eligible for tax deferrals has been expanded. The tax deferral is for the benefit of producers coping with extremely dry growing conditions on forage yields.
Eligible producers in designated areas can 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,” according to the agency. “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 qualify, the breeding herd must have been reduced by at least 15 percent. Thirty percent of income from net sales can then be deferred. In cases where the herd has been reduced by more than 30 percent, 90 percent of income from net sales can be deferred.
“Our government understands the difficulties faced by livestock producers due to unforeseen weather and we are acting,” said Agriculture Minister Gerry Ritz. “With this tax deferral, producers in another 34 drought-affected municipalities will be able to redirect money towards restocking next year.”
Eligible producers will be able to request a deferral when filing their 2012 income tax returns.