. Agri-news. Agriculture. September 8, 1975 FOR IMMEDIATE RELEASE FARMERS BENEFIT FROM NEW INVESTMENT TAX CREDIT Despite the fact thai" the new 5 per cent investment tax credit, introduced in the 1975 federal budget, is only in its second reading and could be changed somewhat before it becomes law, Alberta Agriculture's farm business management branch has received numerous requests about its likely effects on farmers. In view of the number of these requests for information, financial management specialist, Len Fullen, has offered the following explanation of the basic principles by which
. Agri-news. Agriculture. September 8, 1975 FOR IMMEDIATE RELEASE FARMERS BENEFIT FROM NEW INVESTMENT TAX CREDIT Despite the fact thai" the new 5 per cent investment tax credit, introduced in the 1975 federal budget, is only in its second reading and could be changed somewhat before it becomes law, Alberta Agriculture's farm business management branch has received numerous requests about its likely effects on farmers. In view of the number of these requests for information, financial management specialist, Len Fullen, has offered the following explanation of the basic principles by which the scheme will work when it becomes law. The objective of the proposed 5 per cent investment credit against federal income tax is to sus- tain a high level of investment in new productive facilities. Hence, it will apply to the cost of specified investments in new buildings, machinery and equipment purchased between June 23, 1975 and July 1, 1977. The credit will be deductible in full against the first $15,000 of federal income tax payable in any one year, plus one-half of the federal tax payable in excess of $15,000. For example, where a farmer acquires a tractor for $20,000, he would be eligible for a 5 per cent credit, or $1,000, which he could apply against his federal tax liability. The cost of the asset to the taxpayer would therefore be reduced by 5 per cent and his rate of return on the investment thereby improved. The balance of any credit unused in the year that the property is acquired may be carried forward for five years, subject to the same annual limitations. In the case of buildings, the entire cost will qualify for the credit if the building is commenced between June 23, 1975 and July 1, 1977. 'n other words, if construction begins before July 1, 1977 and there is no substantial change in the plans and specifications agreed to in writing before that date, construction costs incurred after July 1, 1977 will continue to qualify. In the case of buildings already
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