. Agri-news. Agriculture. August 5, 2002 Understanding the federal Livestock Drought Tax Deferral For farmers and ranchers, "drought" is one of the nastiest words in the English language. When there's no rain, there's no crop, no pasture, no livestock, no nothing Last year things were just plain dry. especially in southeast parts of the province. This year north-central areas are in the spotlight, and the intensity's been turned up a few notches. "One of the first and most urgent problems that drought creates is the lack of pasture and feed for grazing livestock," says Ted
. Agri-news. Agriculture. August 5, 2002 Understanding the federal Livestock Drought Tax Deferral For farmers and ranchers, "drought" is one of the nastiest words in the English language. When there's no rain, there's no crop, no pasture, no livestock, no nothing Last year things were just plain dry. especially in southeast parts of the province. This year north-central areas are in the spotlight, and the intensity's been turned up a few notches. "One of the first and most urgent problems that drought creates is the lack of pasture and feed for grazing livestock," says Ted Darling, risk management specialist with Alberta Agriculture, Food and Rural Development, Airdrie. "If the situation is serious enough, there's no other answer but to sell part of the breeding herd, and that can translate into major income tax ; To ease the financial pain of writing a significant income tax cheque during the same year that your net income has been slashed by drought, the federal government created the livestock Drought Deferral This arrangement is somewhat unique because it's written into the Income Tax Act (section 80 3(4)). but it comes into effect only when formallv requested bv a provincial government In 2001 and for the first time ever, all of Alberta was designated a drought area On July 24. 2002. federal Agriculture Minister Lyle Vanclief announced that the entire province will continue its designation as a drought area for 2002. Here's how \helivestock Drought Deferral works. If your municipality is identified as a drought area, a portion of the income from the sale of breeding animals can be deferred at least until the next taxation year. Here's some of the fine print: • Breeding animals" refers to cattle, sheep, bison, elk, deer and other "grazing ungulates" that are more than 12 months old and kept for breeding purposes. For most people, this means cows, bulls and replacement stock. Horses kept for Will (pregnant m
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