The livestock tax deferral provisions allow livestock producers in prescribed drought regions to defer a portion of their 2016 sale proceeds of breeding livestock until the next year to help replenish the herd.
The cost of replacing the animals in the next year offsets the deferred income, thereby reducing the tax burden associated with the original sale.
"The Government of Canada understands the impacts that drought and other extreme weather conditions had on farm operations this year, forcing some producers to make difficult business decisions," MacAulay stated.
Low moisture levels resulted in significant forage shortages for livestock producers in Alberta, Ontario and Quebec forcing some producers to sell all or part of their breeding herd.
Eligibility for the tax deferral is limited to those producers located inside the designated areas prescribed as drought regions. Producers can request the tax deferral when filing their 2016 income tax returns.
In addition to the tax deferral, livestock producers are encouraged to take full advantage of assistance available under Growing Forward 2 Business Risk Management programs.
"This tax relief will allow affected farmers to defer a portion of their sales to the next year, assisting them in making sound herd-management decisions," MacAulay added.
Further to discussions with the impacted provinces, additional designations are being added to the list and will be released as soon as possible.
Source : Meatbusiness