Two taxpayers, dealing at arm's length and carrying on an unincorporated farming business, purchased farm equipment in a qualifying region for use on a farm there. However, in the same year, the equipment was also used for a number of months on other farmland owned by them in a non-qualifying region – and the equipment was not used at all in the winter months.
Does the use of the farm equipment in the other region disqualify it, and can each of them claim part of the ITC on the same equipment? CRA responded:
[A]n analysis of the facts must be made … to ascertain the governing intention when the property was acquired. … Thus, the taxpayer must be able to establish the taxpayer’s intention, i.e., to have acquired the new farm equipment primarily for use throughout its lifetime on farm land situated in XXXXXXXXXX.
The term "primarily"… mean[s] more than 50%. The … "operating time" generally refers to the time the equipment usually runs or functions during the taxation year. …
Where there are two co-owners, we agree that it is possible for them to divide the total of qualified property eligible for the ITC between themselves… .