INCOME TAX |
Income Calculation |
Farming |
Kroeker v. Canada
A-465-99
2002 FCA 392, Desjardins J.A.
17/10/02
13 pp.
Appeal from Tax Court decision establishing appellant's chief source of income not consisting of combination of farming and some other source of income within meaning of Income Tax Act, s. 31--Appellant had farming background, operated farm near Swift Current as farming partnership--Moldowan v. The Queen, [1978] 1 S.C.R. 480 applied--In order to have source of income, taxpayer must have profit or reasonable expectation of profit--Factors to consider: profit and loss experience in past years, taxpayer's training, taxpayer's intended course of action, capability of venture as capitalized to show a profit after charging capital cost allowance--Distinguishing features of chief source include taxpayer's reasonable expectation of income from various revenue sources and ordinary mode and habit of work-- Activity herein commercial; constituting source of income-- Quantum measurement of farming income seems relevant but not decisive--In Moldowan, Dickson J. described three classes of farmers--Appellant falling squarely within first class, therefore entitled to deduction of all farming losses for 1993, 1994, 1995--Undisputed facts speak for themselves: appellant's capital, time and labour mainly focussing on farm work--Appeal allowed--Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1. s. 31.