Kerr, J:—This is an appeal from a decision of the Tax Review Board dated February 10, 1972 which dismissed an appeal by the taxpayer from an assessment of income tax for his 1969 taxation year.
The issue is in respect of a disallowance of $695.76 as a deduction claimed by the taxpayer as a farming loss in the said year. The deduc- tion was claimed for municipal taxes and capital cost allowances. In December 1957 the taxpayer was informed by the income tax Department that he could claim depreciation on his buildings, machinery, etc.
The reasons for judgment of the Tax Review Board read in part as follows:
The question in issue is whether or not the appellant was in the business of farming with a reasonable expectation of profit during the year 1969. The appellant testified that during that year he was carrying on a farm operation and that the main area of the farming operation was a family farm established by his grandfather in the 1800’s. He claimed that he has always carried on the business of farming with a reasonable expectation of profit.
The appellant had a full-time job as a bookkeeper. In addition he did some outside bookkeeping work and prepared income tax returns for clients. From the evidence, it was apparent that his farming activities had virtually come to a stop about 1966. No income was reported in 1969 and no expenses or outlays indicative of normal farming operations were reported. Under the circumstances the only conclusion the Board can draw is that the appellant at the relevant time was no longer in the business of farming with a reasonable expectation of profit.
Mr Flindall testified in this Court and argued his case personally without counsel.
The farm in respect of which the farming loss is claimed consisted of about 143 acres in 1969. Mr Flindall was born in 1912 on the original farm of 100 acres and is of the third generation operating the farm. He bought 17 acres in his own right in the early 1930’s; in 1939 he bought the original farm from his father, and in 1950 inherited another 24 acres; and he bought some additional small acreage. A considerable amount of farm machinery and equipment was included in the purchase of the farm in 1939, and he kept it under roof, which helped to preserve it. In 1951 he purchased some more farm equipment, and went in debt to do so. In 1963 and 1964 he added to the equipment. He kept a basic herd of breeding-stock swine for many years, but disposed of them prior to 1969 following lease of part of the property to other operators who had a greater number of swine. Exhibit P-3 is an application by Flindall to increase his basic herd of swine to 5 as of December 31, 1966, at which date he had 6 sows. He had no swine in 1969.
Mr Flindall described the buildings on the farm and exhibited an aerial photo of them. A large barn 75 ft by 30 ft, a lean-to 36 ft by 30 ft, a hog barn 24 ft by 22 ft, a poultry building 40 ft by 15 ft, and a silo were being used in 1969 by other operators under rental agreements. Two other buildings, namely, a brooder house and a corn crib, were not in use in 1969. A barn 40 ft by 38 ft was used in that year for storage of lumber, hay and straw. Hay had been grown on the farm for many years, and commencing in 1963 Flindall started to enter into rental agreements with several operators under which they worked and cropped parts of the farm, having the use of his farm machinery and buildings for the purpose, and the following crops were harvested and lands worked by the operators in 1969: hay 5 acres, corn 30 acres, apples 16 acres, summer fallow 35 acres. The only crops that came into his ownership in 1969 were hay and straw, for which he did not keep a record of value. He had rental income from the farm in 1969, but no cash income. The farm was his home the year round.
Mr Flindall testified also that as a result of lifting on the farm in 1968 he suffered severe back pains and was advised by a chiropractor not to do physical farm work thereafter. Accordingly he did little physical work in 1969. In that year he was employed on a full-time 37 hours per week basis as a bookkeeper by Acme Plumbing and Heating at a salary of $4,826. He also did bookkeeping and made out income tax returns for other parties during his spare time, earning $1,067 in that way in 1969 for about 500 hours of his time. He also averaged about 10 to 15 hours per month doing charitable work for which he did not charge. Most of his spare time bookkeeping was done for farmers who paid him with cash or farm services. He used a mobile trailer as an office. He and his wife in partnership also had a gross rental income of $1,680 in 1969 in respect of a rented house, a building and land used for storage purposes, and a parcel of land separated from the farm for development.
Mr Flindall referred to practices of bartering and exchanging of work and services among farmers, including so-called barn-raising and threshing bees, and said that he traded bookkeeping services for farm work performed on his farm and that in so doing he was carrying on a farming operation. The fact of the olden custom of good neighbourly building and threshing bees is not disputed, but it seems to me that such activities are scarcely comparable to the business activities of Mr Flindall, and furthermore I think that the evidence given by him designed to show work done on the farm in 1969 in exchange for his services falls short, either by itself or along with other evidence, of establishing that he was engaged in farming in that year.
I am satisfied that for many years prior to 1969 Flindall was carrying on farming operations on the farm, and it may be that he will do so again by use of hired labour or otherwise. But insofar as the year 1969 is concerned I reach the same conclusion as the Tax Review Board did to the effect that by 1969 Flindall’s farming activities had virtually come to a stop and in that year he was no longer in the business of farming with a reasonable expectation of profit, although. he continued to live on the farm and make it his home and had a considerable quantity of farm equipment from previous years.
Accordingly the appeal is dismissed, with costs (if demanded) to be taxed.
I will add that Mr Flindall impressed me as believing that he was entitled to the deduction claimed and that he acted in good faith in claiming and appealing, and he conducted his case competently.