Two unrelated individuals (Mr. X and Mr. Y) who hold 50% respective interests in a general partnership (“S.E.N.C.”) through their respective wholly-owned holding companies (“Holdco X” and “Holdco Y”). S.E.N.C. owns land, equipment and buildings used in the operation of a field crop farm (in whose business they are actively involved on a regular and continuous basis). S.E.N.C. also owns rollover preferred shares of Farmco, which is equally owned by them and their two sons and which owns land, equipment and buildings used in the operation of a field crop farm in which all four shareholders are actively involved on a regular and continuous basis.
In indicating that the shares of the two Holdcos qualified as shares of family farm corporations under the “Definition”, CRA stated:
[A] corporation that is a member of a partnership would be considered to be carrying on the same business as that carried on by the partnership. Thus, the property used in the farming operation of S.E.N.C. would be property used in the farming business of Holdco X and Holdco Y and would be property described in paragraph (a) of the Definition.
Similarly, the shares of Farmco so qualified.