The taxpayer acquired farmland and rented 50% of it to an unrelated farm producer and 50% to a corporation that operated a nursery there and whose shareholders were him, his children and some of his brothers. Can the property be considered to have been last acquired after 1987 by virtue of the election? CRA responded:
[S]ince the election under subsection 110.6(19) was made in respect of farmland on February 22, 1994, we are of the view that paragraphs 110.6(1.3)(a) and (b) should be apply.
In this case, since the farmland has been owned by the taxpayer since XXXXXXXXXX, we are of the view that the requirement in paragraph 110.6(1)(a) is satisfied. In addition, since the requirements of subparagraph 110.6(1.3)(b)(ii) appear to be satisfied, we are of the view that the farmland was used in the course of carrying on a farming business, to the extent, of course, that the operation of the nursery constituted farming.