| 24(1) | File No. 900349 |
| C.R. Brown | |
| 957-2082 |
19(1)
May 28, 1990
Dear Sirs:
This is in reply to your letter of April 4, 1990 concerning IT-156R, Feedlot Operators.
A corporate taxpayer runs a custom feedlot operation which has a capacity of 34,000 head. Its activities also include growing and processing feed, grazing and feeding cattle. Approximately 57% of the feedlot capacity presently in use is for feeding cattle that are not owned by the corporation. The cattle are normally fed for 140 days and gain 180 kilograms.
The Department's position on this matter is set out in paragraph 3 and 4 of IT-156R. These paragraphs indicate the feedlot operator need not own all or any portion of the cattle and that a weight gain of 90 kilograms or holding the cattle for an average of at least 60 days is acceptable. It seems evident therefor that the feedlot operation is the carrying on of a farming business for income tax purposes.
If you have a particular concern with respect to a specific case you may wish to consider an advance income tax ruling.
Yours sincerely,
for DirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislative and Intergovernmental Affairs Branch