More livestock producers in rain-soaked areas of Manitoba and Saskatchewan are now qualified to defer income on sales of breeding stock for tax purposes.
The federal government on Tuesday said it would expand the list of designated areas in Manitoba and into Saskatchewan, allowing more producers to defer taxable income from the sale of livestock due to flooding or “excess moisture” during the 2011 tax year.
This second round of designations includes 22 rural municipalities (RMs) in Manitoba and 53 in Saskatchewan — on top of 17 RMs and three unorganized rural divisions designated in Manitoba in July.
Saskatchewan RMs now added to the list for the 2011 tax year include Antler, Argyle, Benson, Bratt’s Lake, Brock, Brokenshell, Browning, Cambria, Cana, Chester, Churchbridge, Coalfields, Cymri, Elcapo, Enniskillen, Estevan, Fertile Belt, Fillmore, Francis, Golden West, Grayson, Griffin, Hazelwood, Lajord, Lake Alma, Langenburg, Laurier, Lomond, Martin, Maryfield, Mcleod, Montmartre, Moose Creek, Moose Mountain, Moosomin, Mount Pleasant, Orkney, Reciprocity, Rocanville, Saltcoats, Scott, Silverwood, Souris Valley, Spy Hill, Storthoaks, Tecumseh, Wallace, Walpole, Wawken, Wellington, Weyburn, Willowdale, Wolseley
RMs added Tuesday in Manitoba include Albert, Archie, Armstrong, Arthur, Bifrost, Brenda, Cameron, Cornwallis, Edward, Fisher, Gimli, Glenwood, Miniota, Morton, Oakland, Pipestone, Sifton, Wallace, Whitehead, Whitewater, Winchester and Woodworth.
“By adding these regions to the list of those eligible for the tax deferral program, producers will be better positioned to cope with the results of the wet and cold conditions,” federal Ag Minister Gerry Ritz said in a release.
For eligible livestock producers in areas designated as suffering from either excess moisture or drought, the deferral is meant to allow them to put off paying tax on income from the sale of breeding livestock for one tax year, so as to help replenish breeding stock the following year.
To defer income, a producer’s breeding herd must have been reduced by at least 15 per cent. If that’s the case, 30 per cent of income from net sales can then be deferred.
In cases where a herd has been reduced by more than 30 per cent, then 90 per cent of income from net sales can be deferred.
Proceeds from deferred sales are included as income in the next tax year, when they can be offset, at least in part, by the cost of reacquiring breeding animals.
If an area is consecutively designated for two years or more in a row, producers can defer sales income to the first year in which the area is no longer designated.
Eligible producers will be able to ask for the deferral when filing their 2011 income tax returns.
By early 2011, over 140 RMs in Saskatchewan and Manitoba had been designated for such deferrals for the 2010 tax year due to excess moisture.