17 October 1990 External T.I. 9028760 F - Cash Advances under Crops Act and Prairie Grain Advance Payments Act

ISSUE SHEET

24(1) CASH ADVANCES

Issue

Numerous calls have been received concerning the reporting requirements for 1990 advance payments received under the Advance Payments for Crops Act and the Prairie Grain Advance Payments Act. Misinformation has been disseminated that such payments are considered income in the year received by farmers.

Response

UNDER THE ADVANCE PAYMENTS FOR CROPS ACT AND THE PRAIRIE GRAIN ADVANCE PAYMENTS ACT, PRODUCERS OF VARIOUS CROPS ARE ELIGIBLE TO RECEIVE ADVANCE PAYMENTS ON CROPS STORED IN THEIR OWN NAMES FROM THEIR RESPECTIVE PRODUCERS' ASSOCIATIONS. ADVANCES RECEIVED UNDER THESE TWO ACTS ARE CONSIDERED LOANS AND ARE NOT TREATED AS INCOME IN THE FISCAL PERIOD YOU RECEIVE THEN. THE FULL AMOUNT OF THE SALE OF THESE CROPS IS ONLY INCLUDED AS INCOME IN THE FISCAL PERIOD THE SALE ACTUALLY TAKES PLACE. THERE HAS BEEN NO CHANCE IN THIS STATED POLICY.

Background

•     The information set out in the Response above is contained in the 1989 Farming Income Tax Guide at page 7.

     21(1)(b)