Farm accountant for the Winnipeg region

The year-end covers the T2 with Schedule 1 and Schedule 50, the CCA schedule, the small business deduction, T4 or T5 slips for the owner’s pay, and the instalments for the year ahead.

Farm businesses that run their own trucks share equipment questions with Winnipeg carriers, and food processors are covered on the Winnipeg manufacturer page.

The cash method, and the adjustments that come with it

On the cash method, farm revenue counts when received and expenses when paid. That controls timing: sell grain in January, not December, or prepay next season before year-end, smoothing income across good and poor crop years.

There are rules. If a cash-method loss includes purchased inventory on hand, a mandatory adjustment adds some back. An optional adjustment adds income in a low year to use personal credits that would be wasted. Decide both before year-end. The cash versus accrual guide explains the two methods.

GST: zero-rated sales, credits still claimed

Basic farm products such as grain, oilseeds and food livestock are zero-rated: you charge no GST but can register and claim input tax credits on GST paid for fuel, repairs, equipment and services. Some inputs are zero-rated too. A registered farm usually gets refunds.

Manitoba adds 7% RST, with exemptions for qualifying farm machinery and inputs. Non-farm-product sales, like custom work or prepared goods at a farm-gate stand, may carry GST. See the zero-rated versus exempt guide and GST filing in Winnipeg.

Equipment, bins and land

Combines, tractors, grain bins and shops are written off through CCA by class; land is not depreciable, which matters when a purchase includes both. A trade-in is a disposal, and selling above remaining tax value triggers recapture. Time large purchases around year-end and the crop.

Keep invoices, financing agreements and trade-in documents together. The CCA classes guide covers the rules, and bookkeeping in Winnipeg keeps the asset register current through the year.

Qualified farm property and passing the farm on

Farmland, quota and shares of a family farm corporation can be qualified farm property. When it is sold, the gain may be sheltered by the lifetime capital gains exemption, and each family member who owns an interest may have an exemption of their own. The tests look back over how the property was used and by whom, so they have to be checked well before a sale. A family farm accountant should check those ownership and use tests years ahead of any sale, while there is still time to act on the result.

A farm used by the family can pass to a child on a tax-deferred rollover with no dollar limit. Rollovers, estate freezes and partnerships suit different families; the farm succession guide and the capital gains exemption guide explain them.

Restricted farm losses and the acreage question

Farm losses are not always fully deductible. If farming is not your chief source of income, alone or with another business, losses can be restricted and carried forward. Many Winnipeg-area families farm alongside an off-farm job, so this comes up often.

The answer depends on the time, capital and intent the farm really has. A growing operation with a plan to be profitable is treated differently from a hobby acreage. We look at the facts before the return is filed, not after the CRA asks.

Paying a spouse or teenage children for real farm work is deductible if the pay is reasonable, actually paid and on payroll records. Dividends to family members fall under the split-income rules, though farm families have exceptions. See paying your spouse a salary and the guide to tax on split income.

What EverStone handles for you

One firm, one fixed fee agreed up front:

• Farm income on the cash method, with inventory adjustments
• T2 and financial statements for incorporated farms
• GST registration and refund filings
• CCA schedules for equipment, bins and buildings
• Qualified farm property and succession planning
• Payroll for seasonal and family workers

Fixed fees, fully online

Nothing needs a drive into the city. A self-employed T1 with farm schedules commonly runs $275 to $500; incorporated farms are quoted after we review your enquiry. See what it costs.

Remote farm accounting

EverStone is a fully virtual CPA firm serving Winnipeg businesses online. There is no Winnipeg office and no local staff. We meet by video or phone; grain tickets, equipment invoices and bank records come through a secure upload link in whatever form you keep them, and documents are e-signed.