Principal Issues: The individual's father owned land that he farmed on a full-time basis for approximately XXXXXXXXXX years until he ceased farming operations in XXXXXXXXXX . The land has been rented out on a crop share basis ever since. Upon her father's death in XXXXXXXXXX , the individual's mother inherited the land but she did not farm the land. Upon her mother's death in XXXXXXXXXX , the individual inherited the land but she also, has not farmed the land. Issue is whether in this situation, the person who meets the gross revenue test contained in paragraph 110.6(1)(vi) of the definition of "qualified farm property" can be the father of the individual.
Position: Yes.
Reasons: There has been no break in the continuous ownership of the property among qualified persons. If the father has met the gross revenue test in at least two years and the property is transferred to the mother, who later transfers the property to the child, the requirements of clause (a)(vi)(A) of the definition of qualified farm property in subsection 110.6(1) of the Income Tax Act may be met for the child, even though the mother never farmed the property, and the child has not farmed the property. In respect of the individual taxpayer's father, whether the real property was used principally by him in carrying on a farming business, whether he was actively engaged in the farming business on a regular and continuous basis, and whether his particular operation would constitute a farming business at any particular time are all questions of fact that would have to be determined.
