Never have I remembered a year that saw the term “volatility” used in every sentence. At the start of 2022, I would have used the word “opportunity,” but as we move into 2023, I would summarize the year more like “that was interesting.”
When a farmer who operates a farm through a proprietorship ?–? that reports income for tax purposes under the cash method ?–? passes away, there are a number of options available for how the farm inventory left behind will be treated for tax purposes. It is very important that executors of the estate understand the options available to them. This alert addresses tax planning options that are often overlooked when dealing with the estate of a farmer.
From transition planning to day-to-day bill payments, knowing the dollar value of your assets is a critical part of managing a farm business.
Values can change drastically over time and space, however. Regular evaluation of farm assets and their worth is important for various best business management practices.
The Excise Tax Act (ETA) outlines specific rules regarding the reporting of GST/HST collected on sales of real property used in commercial activity. The ETA requires self?assessment of GST/HST payable on a transaction by the purchaser, rather than collection and remittance by the vendor. Instead of immediately remitting the GST/HST to the vendor, the buyer is required to declare GST/HST collected and GST/HST paid (if the expense is eligible for an input tax credit) on their own return.