Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Whether Alberta Provincial Govt. farm support payment under Alberta Farm Income Stability Program (FISP) business income from farming.
Position:
Yes, sec 9/28, depending on the method of reporting. Also, within purview of 12(1)(x).
Reasons:
Taxpayer's curiosity was aroused by the treatment accorded NISA payments. The reason being that subsection 12(10.2) & (10.3) specifically dealt with NISA. No such provisions for FISP.
960886
XXXXXXXXXX A.M. Brake
Attention: XXXXXXXXXX
March 25, 1996
Dear Sirs:
Re: Alberta Farm Income Stability Program ("FISP")
This is in reply to your letter of January 29, 1996 regarding the nature of FISP payments made by the Alberta Government to individuals or corporations carrying on a farming business in Alberta, effective for the 1995 taxation year. FISP is a whole farm program, which means all agricultural commodities are eligible. To the extent that a program margin for a particular year falls below 70% of the average of the farmer's previous three year program margins, a FISP payment could be made to the farmer. In our telephone conversation (Brake/XXXXXXXXXX) regarding the reason for your query as to whether a FISP payment would be farm business income, you stated that the question arose because of the special status given to NISA payments.
The NISA payments are dealt with specifically in subsections 12(10.2) and 12(10.3) of the Income Tax Act (the "Act") whereas there are no similar provisions in the Act relating to FISP payments. In our view, a FISP payment should be treated as a regular business receipt to the farmer and included in income by virtue of sections 9 or 28, depending on the method of reporting. In any event, these payments would fall within the purview of paragraph 12(1)(x) of the Act if for some reason they were not taken into income by the aforementioned provisions.
We trust our comments will be of assistance to you.
Yours truly,
R. Albert
for Director
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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