farm corporations?

[Ache4Acres]

Sums in...I think the benefits of the corp come from the compounding that you get of the tax savings each year. Over time that allows you accumulate so much more inside the corp that even if it is taxed later in life to get it out personally you are way farther ahead.

Agree on ISC. And if you are so inclined You can now get new numbered Corp within minutes online.

For sumdumguy....you seem pretty smart.

[AllisWD45]

We did it initially before we sold the farm for tax purposes. Land was kept out because we had capital gain exemptions. Everything else sold to corporation first. We were a partnership for 30 years before that and planned for a couple years before incorporating and selling farm.
A good accountant and lawyer are a must. Saved us a lot of money when we sold.
Easy to pass on we have voting shares and kids non voting shares.
Cost was 3000 to incorporate and 2200 per year for accounting fees.
Now a few small hobby type small business have gone wild and are under the corp. i estimate saved about 30000 in tax this year.
Keeping track and having to treat the corp almost as another person forces you to be much more accountable. I often refer to it as having another wife.

[biglentil]

A CCPC (closely held private corp) enjoys the exact same 750000 capital gains exemption privelege as personal. Though you can only only claim it on one or the other. Unless rules have changed when rolling land into corp you can take personal capital gain exemption if its possible at fair market values. There is also a way to do it so your wife can also use her once in a lifetime 750000 capital gains exemption. Though best to get advice from a tax lawyer that understands the loopholes in the 1500 page Income Tax Act as opposed to an accountant that plays it safe to avoid having his neck on the line. Accountants tend to think CRA bulletins are the law when in fact that is not the case.

[LEP]

I would agree with the tax lawyer recommendation over an accountant. My bookkeeper is a CA that stays at home with the kids.

I feel like I am getting audited every time I take my books in.

She wanted me to depreciate the gravel under bins.

[SASKFARMER3]

Plan wisely As lots of Family and friends and Neighbours are winding down old Corps from the 50s 60s and 70s and 80s. Some its a easy process some its a F$%King Nightmare.
If its two or three that own a company then their kids left and had kids it has other issues.
Liberals might make changes and guess who their going to get. You bet its Farmers.

[Richard5]

Ache and sundum

You are both missinf the concept of having a partnership prior to incorporation and then selling that partnership to the company. When you do this you claim your capital gains exemption, and by the way, isnt it a million now for farmers only?

In the company books you now have that tax paid sum of money loan that allows you to take it out after you create some cash in the company. You dont pay personal taxes on this money, only thr corp rate.

After you have taken that amount out (and if planned right it could be 2 mill) then you would pay personal taxes as you describe

But i think if you created a 1 to 2 mill shareholder loan it would give you a lot of flexibilty or a quicker exit when you are done farming

I am no expert but this is how i understand it, have done lots of reading and sat through a few presentations

[STR1]

LEP, I had the same gravel thing happen to me, they wanted me to depreciate it because it was a part of a capital asset.
My accountant and lawyer have always told me corps allow growth quicker, however a Corp is only tax deferral.Farming in a Corp is so much easier as mentioned not having make pre purchases and deferring to avoid personal income tax.

[sumdumguy]

Richard, you say you sell the partnership to the corp. What is included in that partnership and what are you selling? What is the advantage to forming a partnership prior to incorporation?I presume you are making this step in order to crystallize your personal contribution to the corp. I am not familiar with this angle. Please enlighten me because we have several corps and are getting ready to fold the tent, so to speak. As far as I see it, you are just deferring personal tax ( if you manage to accumulate equity in the corp) but likely paying more tax and accounting fees in the process. I must be missing something.

As far as high-priced accountants, when we had a chartered accountant, what a nightmare. We got into a tax/GST audit. The accountant folded like a punctured balloon and we had to untangle it all ourselves. I went to legal library federal court cases and GST Monitors, found precedence in court cases and CRA backed away, no problem. End of "our" CA - we took charge of record keeping and found an awesome book keeping/accountant in Regina that takes our compiled records and files our tax. He is worth his weight in platinum.

[Richard5]

Sumdum, i guess the chartered accountant you had wasnt very good and maybe worked alone. Its like carpenters, plumbers and even neibours, they are not all the same

I am doing this the 2nd time with my sons. A partnership is something that qualifies for the capital gains exemption (so long as its meets the rules)

What is normally in a partnership is grain, equipment, prepaids and possibly deferred tickets. Its like a grocery bags of these things and when you sell that to the corp you claim your capital gains exemption on the transfer of this.

This in what and why it allows you to take significant dollars out of the company without paying personal taxes like you described

[Richard5]

http://www.mnp.ca/en/posts/family-farm-partnerships

http://www.taxplanningguide.ca/tax-planning-guide/section-1-businesses/the-small-business-deduction/

I just google farm partnerships, all kinds of info that describes some of the concepts