The federal government is offering tax deferrals to livestock producers in designated areas of Manitoba who are struggling as a result of excess moisture. This support comes while governments continue working closely to assess the impact of excess moisture to determine what additional assistance is required.
“The spring of 2011 was very difficult for our farmers due to the destructive flooding on both Lake Manitoba and Shoal Lake,” said Agriculture Minister Gerry Ritz. “The tax relief offered by the program will allow livestock owners to use savings to restock their herds in the spring.”
The tax deferral allows eligible producers in designated areas to 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 reacquiring breeding animals. 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 defer income, the breeding herd must have been reduced by at least 15 per cent. If this is the case, 30 per cent of income from net sales can then be deferred. In cases where the herd has been reduced by more than 30 per cent, 90 per cent of income from net sales can be deferred.
Eligible producers will be able to request this deferral when filing their 2011 income tax returns.
The designated area, which may be expanded later, so far includes the RMs of Coldwell, Dauphin, Eriksdale, Glenella, Lakeview, Lawrence, McCreary, Mossey River, Ochre River, Portage la Prairie, St. Laurent, Ste. Rose, Siglunes, Westbourne, Woodlands, Alonsa, Grahamdale, as well as Division No. 18 unorganized East Part, Division 18 unorganized west part, and Division 19 unorganized.
Livestock producers are advised to contact the Canada Revenue Agency at http://www.cra-arc.gc.ca/cntct/phn-eng.html