Morneau to lower the small business tax rate

[Bowerpower]

What about land transfers to farming kids?

Gift the land, no tax.

[furrowtickler]

Many ways to skin a cat

[Richard5]

Gift the land, no tax.

Why would you ever do this? Sell it across to use any capital gains exemption left, forgive the loan. At lease the next generation has the high cost value on some/all of the land going forward. The next generation would most likely use all of their capital gains exemption up on a family farm partnership if you have an accountant that knows what they are doing

[Richard5]

well this is good news. I'll take it. Not very often we get a tax decrease. Now as for wher they will try to get the tax revenue shortfall is speculation at this point. We'll lynch trudope and morneau when the time comes.

Remember people, this is only the first level of tax. When you take funds out beyond shareholder loan balances the dividend rate comes into pay (second level of tax of 20-35%)

I struggle with the thinking that lowering is a good thing as its only going to make the second level of tax higher on “old” earnings since the dividend tax credits will be adjusted to reflect this reduction.

If the government is seriously looking for money, leaving as is or increasing to 15% may be a better and easier option.

At the end of the day, down the road, it flows through and the gov’t will get their share

[SASKFARMER3]

This is all liberal smoke and mirror look here and screw you over their. Never trust them.

Why no taxing Trust Funds.

[Bowerpower]

Why would you ever do this? Sell it across to use any capital gains exemption left, forgive the loan. At lease the next generation has the high cost value on some/all of the land going forward. The next generation would most likely use all of their capital gains exemption up on a family farm partnership if you have an accountant that knows what they are doing

Yes of course collect the capital gains. Could also transfer money to farming corp and have shareholder loan options to avoid tax. Or what if I have the mindset land will never be sold, give the next generation a head start. They will be land at some point to further the farming entity. Lots of options.

[Bowerpower]

Remember people, this is only the first level of tax. When you take funds out beyond shareholder loan balances the dividend rate comes into pay (second level of tax of 20-35%)

I struggle with the thinking that lowering is a good thing as its only going to make the second level of tax higher on “old” earnings since the dividend tax credits will be adjusted to reflect this reduction.

If the government is seriously looking for money, leaving as is or increasing to 15% may be a better and easier option.

At the end of the day, down the road, it flows through and the gov’t will get their share

Agreed, it is just a political play. And yes they will get their tax sooner or later. We are in the crosshairs, property taxes, school taxes, inheritance tax etc. gov need money.

[mcfarms]

I'm planning on using the Charlton Heston estate planning strategy
" You can have it when you can pry it out of my cold dead hands"

[Bowerpower]

I'm planning on using the Charlton Heston estate planning strategy
" You can have it when you can pry it out of my cold dead hands"

Lol. Hopefully your children don't "spike" your favourite drinks

[fjlip]

Yes of course collect the capital gains. Could also transfer money to farming corp and have shareholder loan options to avoid tax. Or what if I have the mindset land will never be sold, give the next generation a head start. They will be land at some point to further the farming entity. Lots of options.

Absolutely correct, Bower, incorporated our "partnership" last December. And you MUST be a partnership first. MNP will be using the exemption on buildings and machinery, then the share holder loans can come into play, whenever.

[blackpowder]

I'm not sure the capital gains tax we have on farmland is sensible at all the way it is. Just me.
Joe Lunchbox inherits a quarter from whomever and has to sell it to pay the tax. Non farming children/siblings or even the neighbor kid. The only way to get wealthy quick from farmland is to sell it. Keep skimming evry generation and only a few left after while.
All well and good for the operations that cashflowed proper current strategies. But for the rest.
My siblings cant fund insurance on themselves never mind. Any inheritance to them from either their parent or myself would result in a sale. And really a million is sfa given land jumps in AB. Parents that never planned. My siblings are chasing me down with sharp knives over this shit.

[Sodbuster]

Absolutely correct, Bower, incorporated our "partnership" last December. And you MUST be a partnership first. MNP will be using the exemption on buildings and machinery, then the share holder loans can come into play, whenever.

This unfortunately is probably one of the loop holes our finance minister was trying to close, of course I am a bit jealous as I missed the partnership route when i incorporated many years ago.

[sumdumguy]

I'm not sure the capital gains tax we have on farmland is sensible at all the way it is. Just me.
Joe Lunchbox inherits a quarter from whomever and has to sell it to pay the tax. Non farming children/siblings or even the neighbor kid. The only way to get wealthy quick from farmland is to sell it. Keep skimming evry generation and only a few left after while.
All well and good for the operations that cashflowed proper current strategies. But for the rest.
My siblings cant fund insurance on themselves never mind. Any inheritance to them from either their parent or myself would result in a sale. And really a million is sfa given land jumps in AB. Parents that never planned. My siblings are chasing me down with sharp knives over this shit.

Not everyone thinks that farming is the only game in town. There's more to life for some who look elsewhere.

[Richard5]

This unfortunately is probably one of the loop holes our finance minister was trying to close, of course I am a bit jealous as I missed the partnership route when i incorporated many years ago.

That’s very unfortunate Sod, what kind of professional or non professional are you working with that wouldn’t have brought this great tax strategy 15 years ago

Its not too late, if you work with a professional agriculture accountant form one now. Do you have a son involved, form one with him. There are numerous ways to do this.

Have done it more than once and have one with my son now. It will also help in a transision strategy for myself also down the road

[Sodbuster]

I incorporated 22 years, that option was not suggested to me at the time. Thanks for the info, I will look into it.