Deferred crop insurance update

[Gerald_sk]

Well got statement from crop insurance and meet with accountant Friday(MNP). The money
is deferred to 22, but not the income, as it is crop insurance. Also found out the 100%
write-off only applies to corporations, so no new combine .
End result I will be owning something over $20000 extra tax. I did a little digging.
Last claim was the Blizzard of 16. With the possible tax and premiums since 16 I am at
about break-even, so where is this 2billion lost due to crop insurance.

Bad time and year to start hiding income, but will start tomorrow. I haven’t done
the prepay stuff for about 10 years. Last time was a big screw-up in the spring.

G

[farming101]

You're right on the immediate expense provision for class 20 and 30. You still have the accelerated provision though.
But, if you have deferred payment on your crop insurance indemnity it is not going to show up on your AGR-1 till the 2022 tax year. I assume your tax year runs from Jan 1 - Dec 31

Where's Richard5?

[riders2010]

My accountant goes by the date of the issued cheque?

[poorboy]

There must be a list of approved things that can be defered. For example Peas are not a crop that can be legally deferred.

In Alberta the crop ins issues the paperwork and check both on the date that payment is deferred to so technically legal to defer.

[Ronski]

Is there a cash vs accrual accounting difference? InCorporated vs sole proprietorship?

[ry0972]

Gerald, So what did MNP say to do?
If the Crop Ins cheque is classed/claimed/reported as income for 2021 WHAT if any reason would there be to defer it to 2022?
Why not take the $$ now and buy some inputs, parts and maybe a piece of equip or 2 that you need to upgrade??
I have a farm corp and have done an end of year run through to evaluate taxable situation for personal and corp taxes.
I can use the 100% accelerated depreciation but do not have anything that I NEED that is not priced WAY out of this world at this time.
I did buy some extra chem, fert and fuel and extra parts earlier and that will get me to a tolerable amount to send east to be wasted.
I do not have crop insurance so I wont spend $$ I really dont need to with how dry it is.

[fjlip]

Did the budget pass? MNP told us last week, not law yet. Already have iron purchased earlier that qualifies for 100%, at very least, accelerated.
Maybe options, but filed as cash, corp reported as accrual.

[Gerald_sk]

Guess I need to look at another account. Just finished talking to Crop insurance.
AG1? will show no income this year. First thing he said was that you must use
MNP as your accountant.
If you read CRA site it can’t be deferred, but If I don’t see the cash it is also
not income(cash accounting)
Anyway if MNP and CRA want to play games, I can also do the same.
Most likely buy and file an inventory adjustment. Already agreed to pay
off my prebooked canola.

[TOM4CWB]

Guess I need to look at another account. Just finished talking to Crop insurance.
AG1? will show no income this year. First thing he said was that you must use
MNP as your accountant.
If you read CRA site it can’t be deferred, but If I don’t see the cash it is also
not income(cash accounting)
Anyway if MNP and CRA want to play games, I can also do the same.
Most likely buy and file an inventory adjustment. Already agreed to pay
off my prebooked canola.

If on cash accounting... then revenue canada can insist that you have inputs on hand Dec 31 technically...

The day you cash a cheque... is the day it is income, for legitimate farmers.

Cheers

[poorboy]

If on cash accounting... then revenue canada can insist that you have inputs on hand Dec 31 technically...

The day you cash a cheque... is the day it is income, for legitimate farmers.

Cheers

I don't think that is correct Tom. It is the date on the check that is the date of the income. If you have a check dated today and deposit it in January, the income is for todays date on cash accounting.