Shake my head

[Guest]

An opposing view:

That'll be the day I leave my cash parked in some grain company's bank account

If sole proprietor use the OIA line 9941 and 9938
If incorporated pay the tax, put the money to work and move on

I agree , not trying to be ignorant ,but why wouldnt everyone incorporate ?we started first co 15 yrs ago. Have 3 now ,small acreage farmers . Incorporating has been a godsend. Lets you grow your farm at 13% tax. Not that expensive to do

[Nudge]

VValk,

I didn't see anywhere that there was suggestion of taxing inventory, or moving to an accrual basis of accounting. In your example you're saying it would move harvest pressure to Jan from sept? How so? only if you had deferred into Jan the year before. Not saying I agree with changing it but just pointing out where I believe you are making assumptions.

The two main users of this policy would be unincorporated farms and those who are incorporated and hovering around the small business limit.

What effects would come of the change?

Grain co's would have to define clear policies around how long grain can sit in storage before being 'cashed out'

Unincorporated farms earning over 100,000 a year would be more likely to incorporate. Not sure that would be a net tax generator for the govt.

Input supply companies will essentially never have to borrow money, as farmers will collectively pre buy more inputs.

For those that are not using this policy as a income smoothing tool, but instead using it to perpetually defer more every year and/or buying more inputs every year...well I think that is poor decision making.

[LEP]

I agree 100% Nudge. I know several people that use deferring grain or buying inputs as a strategy to manage income or tax paid. But it often has a very poor payback. You get a benefit the first year and then you are trapped into continuing forever for no benefit.

Incorporate and then never worry about tax rate you pay. If you pay the high rate of tax you get a bigger dividend tax credit on your personal income tax when you pay out dividends, so it is a wash.

If you have a tax problem get a good tax specialist.

The only thing certain in life is death and taxes.

[macdon02]

http://www.financialpost.com/m/wp/news/economy/blog.html?b=business.financialpost.com/news/economy/tax-fairness-bill-morneau-says-ottawas-wide-ranging-review-could-target-tax-planning-strategies

If you thought you were protected in a Corp ....

[MBgrower]

I agree, time to summerfallow. Why work for nothing?

[blackpowder]

Well I'm sure the 80/20 rule applies. <20% of farmers are not incorporated so **** em right?

[vvalk]

VValk,

I didn't see anywhere that there was suggestion of taxing inventory, or moving to an accrual basis of accounting. In your example you're saying it would move harvest pressure to Jan from sept? How so? only if you had deferred into Jan the year before. Not saying I agree with changing it but just pointing out where I believe you are making assumptions.

The two main users of this policy would be unincorporated farms and those who are incorporated and hovering around the small business limit.

What effects would come of the change?

Grain co's would have to define clear policies around how long grain can sit in storage before being 'cashed out'

Unincorporated farms earning over 100,000 a year would be more likely to incorporate. Not sure that would be a net tax generator for the govt.

Input supply companies will essentially never have to borrow money, as farmers will collectively pre buy more inputs.

For those that are not using this policy as a income smoothing tool, but instead using it to perpetually defer more every year and/or buying more inputs every year...well I think that is poor decision making.

Yes I laid out 2 options, no assumptions. Looking further into it, yes it would be based on when you sold your grain not inventory. Was saying then that farmers won't deliver until January. According to the law technically you can't defer pulses or corn or soybeans etc

[blackpowder]

As I said earlier. Havent deferred a check in decades. Fine with me if thats all they touch. Right.....

[foragefarmer]

vvalk are you not incorporated? It' sure sounds like your not!

Who in their right mind would take a chance on any grain company holding your money for months? Deferral was popular with CWB grains as they had the Canadian government backing them. Taxes always catch with you eventually!