Livestock Tax Deferral Provision
The Livestock Tax Deferral provision is available to farmers operating within prescribed regions who have sold part of their breeding herd due to adverse weather conditions. Specifically, it targets those in identified drought or flood zones who have had to reduce their breeding herd by at least 15%.
Overview
If you sold at least 15% of your breeding herd due to drought or flooding in Gaspésie, New Brunswick, Prince Edward Island or Northwestern Nova Scotia, you can defer up to 90% of the sale proceeds to the following year.
At a glance
Funding available
- No objectives are currently available
- Up to 15% of project cost
Eligible candidates
- All industries
- Canada
- Sole proprietorship
- For-profit business
- All revenue ranges
- All organization sizes
- Rural or Northern Residents
Next Steps
Official resources
Eligibility
Who is eligible?
The Livestock Tax Deferral provision is available to farmers operating within prescribed regions who have sold part of their breeding herd due to adverse weather conditions. Specifically, it targets those in identified drought or flood zones who have had to reduce their breeding herd by at least 15%.Who is not eligible
This provision primarily targets farmers within specific prescribed regions affected by drought or flooding. There are no explicit mentions of other industries or businesses being eligible or restricted.
Eligible geographic areas
This provision benefits farmers operating in specified regions identified due to adverse weather conditions. Eligibility is determined by drought and flood region designations.
- Designated drought and flood regions as prescribed by the Canadian government.
- Regions adjacent to the prescribed drought and flood regions beginning in 2024.
Selection criteria
In order to qualify for the Livestock Tax Deferral provision in Canada, farmers must meet specific evaluation and selection criteria. The criteria include the percentage reduction of the breeding herd and the designation of prescribed drought or flood regions by the Minister of Agriculture and Agri-Food Canada.
- Breeding herd must be reduced by at least 15% to qualify for income deferral.
- Different levels of income deferral are available based on the percentage of reduction in the breeding herd.
- Prescribed Drought and Flood Regions are designated when forage yields are less than 50% of the long-term average due to drought or flooding.
- Regions must have recognized geo-political boundaries and significant industry impact to be designated.
- Assessments of prescribed regions are made based on spring moisture, summer rainfall, and forage yield estimates.
How to apply
Here are the steps to apply for the Livestock Tax Deferral provision:
- Step 1: Identify Eligibility
- Determine if your farm is located in a region that has been prescribed due to drought or flood for the relevant year by consulting the prescribed regions list.
- Ensure that your breeding herd has been reduced by at least 15% as required for eligibility.
- Step 2: Gather Documentation
- Compile records of livestock sales and purchase details for the applicable tax year.
- Ensure you have documentation supporting the reduction in your breeding herd.
- Step 3: Calculate Deferral
- Calculate the percentage of income that can be deferred based on the reduction in breeding herd: 30% for a 15%–30% reduction, or 90% for over 30% reduction.
- Step 4: Complete Tax Reporting
- Use the CRA publication T4002, Chapter 2 to correctly report your farming income deferral on Line 9470.
- Seek advice from the Canada Revenue Agency if needed to ensure accuracy.
- Step 5: Submit Tax Forms
- File your income tax return with the Canada Revenue Agency, including the deferral amounts correctly calculated and reported.
- Step 6: Confirm Submission
- Retain copies of your tax forms and any correspondence from the CRA for your records.
Additional information
Here are additional relevant details for this grant:
- Regions adjacent to qualifying areas are also included to ensure broader coverage for farms affected by adverse weather conditions.
- Updates to prescribed regions are monitored and communicated throughout the growing season to keep farmers informed.
- The process for identifying prescribed regions has been streamlined to allow earlier identification and assistance for farmers.
- The Canadian Drought Monitor plays a crucial role in gathering data used to identify prescribed regions.