| 19(1) | File No. 900379 |
| W.C. Bailey | |
| 957-2061 |
June 21, 1990
19(1)
Re: 24(1)
This will reply to your letter of March 28, 1990 concerning the operation of a cattery. We apologize for the delay in our response.
You inquire whether you can claim the operation of breeding and showing of Siamese cats as a business for tax purposes. We presume you are concerned as to whether you can deduct the losses from such an operation.
The breeding and showing of cats would fall under the category of livestock raising or exhibiting which is classified as farming for tax purposes. If you carry on the operation with a reasonable expectation of profit, some or all of the losses could be deductible depending upon whether section 31 of the Income Tax Act applies. On the other hand, if you carry on the operation as a hobby for your own enjoyment with no expectation to profit, no losses would be deductible. We are enclosing a copy of IT-322R, Farming Losses, for your further information in this matter. If you need to explore the question further, we suggest that you discuss the details of your particular case with officials of the district taxation office where you file your income tax return.
You have also enquired about a tax exemption on food and litter. This question appears to be related to the Ontario Sales Tax rather than federal income tax. You should therefore make your inquiries on this matter to your nearest Ontario Sales Tax Office.
We trust these comments will be helpful.
Yours sincerely,
E.M. Wheeler for DirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislative and Intergovernmental Affairs Branch
Encl.