Agricultural Updates 2013
Registration for the 2013 Agriculture Updates is now open. Sessions take place across Alberta and Saskatchewan between October 21 and 30th. For more information please download the new brochure HERE
Welcome to the 34th year of the Agriculture
Update for Professionals. This year, we are excited to expand the course by offering two streams: 1) Capital Partnerships and, 2) Opportunities for your clients in the Agricultural Industry. For years, Operating Partnerships have been used to hold inventory and equipment; the driving force was to convert a partnership interest into a tax paid shareholder loan… but what about holding land inside a partnership? This topic was presented at the Farm Tech 2013 seminar with 1500 producers in attendance. Farmers became extremely interested once they were made aware of the flexibility and control offered in a family farm context.
I have asked Greg Gartner and Merle Good (now private consultant) to present a more detailed overview for you as professional advisors. Included in this presentation will be examples of how Capital Partnerships can be structured like discretionary family trusts, and using them to affect an estate freeze. Additionally, how using a partnership in combination with an operating company may create the most flexible option available in structuring a farm business.
The Agricultural section will review recent land value trends and affordability, provide an update on commodity cycles and discuss the new Federal Growing Forward 2 programs available for both Alberta and Saskatchewan farmers. The balance of the seminar will conclude with our Tips and Traps section, unique court cases and recent technical interpretations. On behalf of Greg Gartner, Merle Good, Alberta Agriculture and Rural Development and the Alberta Community Cooperative Association, we look forward to offering this year’s seminar to you and hope to see you this fall.
Manager of Business Structures, Financial Policy
Alberta Agriculture & Rural Development
2012 Agricultural Updates for Professionals
TOPICS FOR THE DAY:
Have you read the NEW BIBLE
The second edition of the Tax Management Strategies for Farmers Publication has been completed. This publication is full of tips and traps that anyone involved with advising farmers needs to know.
- Income… how to report weird income like surface lease payments, water rights, sale of grazing leases, pipeline payments sale of gravel , mineral rights payments etc..
- Expenses… Prepaid leasing options, home office expenses, wages to family members, yearend deferrals, farm losses, grain storage arrangements, motor vehicles, new farm site expenditures, etc.
- Property…Capital gains exemption, rollover rules, life estate and remainder man interests, land transfers and GST, etc.
- Business Structures…Partnerships, corporations, Income splitting techniques
Last Year issues Revisited….
- Update on the new Wills and Succession Act… how will it actually work in Alberta and Saskatchewan?
- US Citizens living in Alberta with farm property. Reviewing the new IRS announcement of this June!
High Risk Plans…are they effective???
- Personal Corporate Hybrid with the Capital Dividend Account Plan and RDTOH planning…the name even seems scary!!!
- Geransky Twist… the new dance wave when selling real estate.
Family Farm Succession using Partnerships and Corporations
- What is the difference and benefit when a Trust is put in the middle?
- Estate Freeze issues. We need to use more complicated share structures.
- Intergenerational rollover rules…transfer equity to the next generation now!!
- Purification issues…a real big problem with large operations.
Tips and Traps
- Canada Revenue Agency interpretations.
- Various court cases…some very interesting new developments…
- Update on 2012 Federal Budget
Agricultural Update 2011
Outline of the Day
The New Wills and Succession Act and Amended Matrimonial Property Act – Expected to become Law January 2012 learn the impact on you and your
- The Matrimonial Property Act is amended to allow a surviving spouse to make an application to the courts for a share of a deceased spouse’s estate. What changes to wills should we be considering given the new legislation?
- Changes to the survivorship rules reverse the rule that if two or more people die at about the same time, for property distribution purposes, the youngest is deemed to have survived – find out how the new rule works.
- Under the new legislation marriage will no longer revoke a Will but divorce will revoke the gifts to the ex-spouse. Find out the impact on farm estate plans.
- Learn the new procedure for potentially validating an improperly executed will.
- There are significant changes to the Intestate Succession Act If no Will; does the spouse now get everything (versus sharing with children?)?
- When will a transfer of farm property to a child during life be considered as advancement on that child’s interest in the estate? Find out the effect of a lack of proper farm estate planning.
Trusts – Have they become of age for farmers?
When should we be using
- Mineral rights – does a trust make sense?
- Inter-vivos (during lifetime) vs Testamentary (created on death) trusts – differences from a tax perspective
- Income Splitting?
- Non-Resident Children
- Can a non-resident child return to Canada after death of a parent and have the rollover rules apply on the parent’s death?
Death and Taxes – this session will cover the basics for unincorporated farmers, the more complex rules and planning for an incorporated farmer and other tips and traps for tax planning both before and on death
- The Basics – deemed dispositions, rollovers, capital gain exemption and planning
- The Cash Basis income trap for unincorporated farmers
- Rights and Things – what are they and what are the options again?
- What is the difference between using the capital gain exemption on death if property left to spouse versus children (yes there is a big difference)?
- What farm assets don’t rollover on death in any situation (Quota?)
- Corporate Farmers – how to avoid double tax on death – 164(6) of the Act or the “Pipeline” strategy
- Losses on death and how to use
- Revisit the rules on debt forgiveness in Estate situations.
So your client wants to buy a Vacation Property – what do we need to consider?
- If in Canada – what are the considerations? – Who should own it use a trust? Co-ownership?
- Principal Residence issues
- Passing on to the next generation
- If in U.S. – again, what are the considerations? – Who should own it? How should it be structured? Are the complex plans out there really worth it?
Tips and Traps
- The new accounting rules for valuing assets on the balance sheet – implications?
- Can I split up the corporate farm between family members if the assets are now being rented out using a related party type butterfly?
- Large Corporations Capital Tax – not usually an issue except for the small business limit
- November, 2010 technical bill – looks like the long promised wording changes for farm rollover and capital gain exemption are finally on their way
- Update on 2011 Federal Budget
- Paying an eligible (lower tax rate) dividend – some items to watch for – what if we over elect?
- Can we strip value for the benefit of a particular shareholder using a stock dividend?