The correspondent’s husband acquired the land (the “Land”) and other assets from his father in order to continue carrying on the family farm business, but then ceased to carry on the farming business. However, the Land has continued to be used in the farming business by a farmer who was known to him, who exploits the Land in exchange for the harvest he obtains. Is the Land a qualified farm property? CRA responded:
[O]ne way in which this condition [in 110.6(1.3)(b), now s. 110.6(2)(a)(ii)(A)] would be satisfied is if it were shown that, for at least two years during which the Land was owned by your late spouse, the gross revenue derived by your late husband earned from the farming business exceeded his income from all other sources of income and that, for that period, the Land was used principally in a farming business carried on in Canada in which he was actively engaged on a regular and continuous basis.