Year End for taxes, Is overlap allowed?

[AlbertaFarmer5]

I was recently told that we can use discretion on which year to put income or expenses into if it is comes close to the year end. Is that true? If I receive a check written 3 days before year end, arrives 2 days after, I always used the date it was written. Same with expenses, but having some flexibility would be good.

[sumdumguy]

Never heard anything like that but it would make sense since many defer income at year end or are incurring expenses to reduce net, but for corps doesn't matter.

[fjlip]

Call CRA. Always thought cash filing meant the date on transaction.

[LEP]

You can do what ever you want as long as you aren't caught.

I always thought income was the date on the chequered and expenses the date it cleared the account.

[Richard5]

Lep, your expense comment I think is not totally correct. Expenses would be the date the transaction is negotiated.

That being said, some input guys here keep the books open for a while into the new year so that Dec 31 purchases can be made with the prior year date yet

If paying by credit card this wouldn't work as the transaction will have a automated date on it (at least with the new Cr Card machines)

As far as the comments about if incorporated it doesn't matter, I would think many farms about 4000 acres would sstruggle keeping the cash income under $500,000 so therefore may be prebuying/defering to manage it within that if possible

[MBgrower]

Transaction date. I dont think an auditor would allow anything else.

[sumdumguy]

Richard -cash income under $500,000? Do you mean net income?

[Richard5]

Yes, since it is still on the cash method for income tax, a 5000 acre or more farm with a couple good years could struggle to keep the income below this

It depends more on the amount of land payments being made. With interest rates generally lower the majority is all on the loan - which you don't get to use as an expense.

[farmaholic]

I think CRA let's farmers manipulate their income/expense statemente by allowing deferrals, prebuys, and inventory adjustments to stabalize their income.

[Hopalong]

Would point out best chance to collect Agristability is with highly variable income year to year.
Income tax is opposite, best to average income to reduce amount paid.