Mr. A owned farmland and farmed it for his chief source of income. Under his will, the farmland was devised to his daughter who does not farm it and might sell it more than 24 months after his death. Would this cause the conditions in ss. 110.6(1.3)(a)(i) and 110.6(1.3)(a)(ii)(A) not to be satisfied?
CRA noted regarding s. 110.6(1.3)(a)(i) that it required that the farmland have been owned for the period of at least 24 months immediately preceding the determination time (the daughter’s disposition) by one or more of the specified persons or partnerships such as her, her father and his estate. Here, since the farm was owned continuously by Mr. A, his estate and his daughter for a period of at least 24 months immediately preceding the daughter’s disposition (irrespective of whether that disposition was more than 24 months after his death), this test was satisfied.
Regarding s. 110.6(1.3)(a)(ii)(A), it would be satisfied if in at least two years when the father owned the property, it was used principally in a farming business carried on in Canada in which he was actively engaged on a regular and continuous basis, and his gross revenue from the farm or fishing business exceeded his income from all other sources. It would not matter that he was not the person who owns the property at the determination time, nor during the prior 24 months.