INCOME TAX |
Income Calculation |
Farming |
Watt v. Canada
A-834-99
2001 FCA 72, Sexton J.A.
16/3/01
7 pp.
Appeal from T.C.C. of Canada decision dismissing appellant's appeal--Appellant practising dentistry in Saskatchewan since 1965--In 1973, appellant, wife incorporated company which commenced to purchase farm land, equipment--For years 1992, 1993, 1994, appellant's farm generated losses totalling $72,935, $42,345 and $86,561 respectively--Appellant spent about 2000 hours per year on farm operation and about 1500 hours per year on dental practice--Sought to deduct farm losses for years 1992 to 1994 from other income--Deductions disallowed by Minister--In dismissing appeal, Court having sympathy for lot of farmers such as appellant--Income Tax Act, s. 31, case law applying test which may, in some cases, seem unfair--Many s. 31 cases brought before Tax Court, Federal Court producing sometimes conflicting results--Despite appearance of unfairness in some cases, where taxpayer with well-paying job also seriously involved in unprofitable farming but not "hobby farm", Parliament has not re-examined provision which Dickson J. in 1977 described as " awkwardly worded and intractable section"--Nor has S.C.C. revisited problem since 1977--Perhaps time to amend, at least clarify provision to make it more suited to our time--Appeal dismissed --Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 31(1).