Capital Gains

[blackpowder]

A happy medium is what we're all after.
Reality seems to be.
If large enough to hand down to kids intact you can likely afford the taxes as they are today with good planning. Future increases aside.
The smaller ops will have a harder time. But they won't have kids taking over. So just retirement to fund and kids startup education etc. Taxes hit the "middle class" the hardest.
My plan here is that the corp will carry on for one more gen after me but not with my kids in it at all. Depending on their choices as adults.

[AlbertaFarmer5]

Thanks for your thoughts Jwab. I agree with all of it.
And I also don't have an answer to publicly owned corporations becoming perpetual monopolies. But I suppose if the shareholders themselves are subject to punitive capital gains, that would have some effect. And of course allowing individual entrepreneurs the opportunity to put their Capital to work to create alternatives to the big corporations would help a lot too. Very difficult to do that when the individual entrepreneur is trying to build Capital at personal tax rates versus the corporation at corporate tax rates.
Within the tax code There needs to be some differentiation between personal income destined for investment and personal income destined for squandering.
Why do I have to invest in someone else's business within an rrsp to get a favorable tax rate, but I can't invest in my own business without paying prohibitive personal tax rates.
Consumption taxes as opposed to income taxes being the most obvious answer.

[Richard5]

Just bantered back and forth with my accountant, says she is seeing lots more clients locking in their gains now. Somethings coming.[/QUOTE]


Just curious if you accountant mentioned using your exemption using Bill C208? If I were someone that had a lot of exemption left I would never EVER sell a bunch of land to your company only to create the capital gain. 1 quarter maybe to create some shareholder loan but if someone is encouraging this you might want to get another opinion.

Had the discussion in July with my accountant on the following. Hopefully I can explain it right. Bill C208 is basically creating a capital gain that is eligible for your capital gains exemption by selling some of your common shares to another company that you own. You need to have a clear succession plan is the one hurdle so it wasn't a great fit for me presently.

Again, moving land into a corporation will only result in a taxable dividend to someone down the road. Make sure you understand the result 5-10-20 years down the road

And to the comment about creating a partnership with your wife and magically being able to use her exemption 2-3 year later is not correct also. As it was explained to me, the partnership's value would have to grow by 2 million in order to say your wife's share is 1 million (assuming 50/50). BE VERY careful as if this is not calculated correctly it will be a mess that will surface a few years down the road. My accountant says he has seen a few clients come in from other firms who have done this wrong and CRA reviewed. Not much he could suggest other than talking to a lawyer and suing for damages

[fjlip]

Agree richard, if wife is NOT deemed full time farmer, we had partnership for 19 years, all assets purchased jointly, land owned jointly. She never worked off farm in those years. Best review your situation with accountants, maybe lawyer first.

[Old Cowzilla]

This Nobleman had to install a new thrown in the basement a couple days ago. You would think with all this wealth I have I could have hired it done. Did send Justin some tax for the thrown thou !

[chuckChuck]

If the goal is to stay a step ahead of possible tax changes, keep in mind that companies don't vote, middle class taxpayers do.
Not much political fallout from taxing corporations. Where as taxing the voters is a sure way to lose the next election.
And farmers don't vote Liberal (except carpet farmers, right Chuck), so taxing corporate farms is the path of least resistance.
Be it gc, income tax, property taxes, environment tax or outright wealth tax.

You ignore the reality that the tax burden has shifted over time from corporate to personal taxes.

And since most farmers can incorporate and fit in the small business classification with relatively low tax rates up to $500,000 in net income where is the burden of farm corporate taxation you speak of?

I know libertarians often don't want to pay taxes but still want to enjoy the benefits of living in a developed country, but you are really barking up the wrong tree if you think incorporated farms who qualify for the small business exemption are paying a lot of taxes.

[AlbertaFarmer5]

Read the post again chuck. Future tense not past tense. Jazz is trying to protect himself from future tax changes not what happened in the past.
But I am pleased to know that you have your crystal ball calibrated in to accurately predict the past.

[jazz]

I know libertarians often don't want to pay taxes but still want to enjoy the benefits of living in a developed country, .

When a developed country flushes $1T into a black hole with nothing to show for it and every intention to keep doing it, I am out. Society be damned. Let the woke pay for it.

I respectfully disagree with ABF, I dont think our kids can out work socialism.

[AlbertaFarmer5]

When a developed country flushes $1T into a black hole with nothing to show for it and every intention to keep doing it, I am out. Society be damned. Let the woke pay for it.

I respectfully disagree with AB, I dont think our kids can out work socialism.

Except socialism is about to collapse under it's own weight. How far they drag the rest of us innocent bystanders down with it in the process is the only question. Work ethic is about the only asset that is guaranteed to be carried through to the other side intact.

[blackpowder]

I've always felt Joe Lunchbox pays too much tax. Certain brackets.
Are taxes moral if the money continually wasted? Is Ottawa today akin to George III?
Can our resident skimming Karen understand that one?

[chuckChuck]

You guys seem to forget that you live in one of the richest most successful countries on earth and have a standard of living that the majority of the planet would love to have.

So here we have a small group of farmers who often complain that everyone else got a bunch of covid support whether they needed it or not and you are pissed because farmers didn't get their share?

If you are not in favour of governments supporting their citizens during a time of crisis, how can you expect to receive "socialist" taxpayer handouts as well?

[blackpowder]

That doesn't make it right to throw it away.