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The Rural Voice, 1979-09, Page 8meet all their farm taxation needs. The Wallaces, both graduates of the agricultural program at the University of Guelph, worked in the food industry in Toronto for three years before deciding they'd had enough of city Life and wanted to return to the country. In 1976, the couple moved to Bill's family farm outside Seaforth and decided to put some of their education to work. Although Bill and his father had discussed operating the farm om * partnership basis, Mr. Wallace senior decided he'd rather turn the farm over to the young couple and take a job in town. For the first two years, Bill and Rowena rented the 100 -acre dairy farm from Bill's father, but then Rowena said jokingly. "we made $500 and it went to our heads, so we bought the farm." In addition to the land, the couple also purchased livestock and machinery from Bill's father. Today, the couple have 35 milk cows, grow their own corn and alfalfa for feed and only purchase additional grain and concentrate. Bill Wallace also has a seed corn dealership.: The couple said their accountant recom- mended they set up the partnership arrangement right at the time of the farm's purchase to help with tax breaks. Also, if partnership arrangements are drawn up from day one of a farming operation, then this makes things easier for the taxation department. Or, as Rowena Wallace said with a smile, "When you aren't making anything, it's easy to split it." Since drawing up their partnership agreement, the couple have learned it might have been better if the land hadn't been part of the partnership. While the couple said the legitimate reason for having a husband and wife partnership is that both partners are contributing to the farm both financially and with their labour, it's likely many couples form a partnership arrangement for the tax breaks. When tete Wallace's accountant is calculating the annual farm return, he then divides the income so the couple can file separate returns. $i11 adds his income from the seed dealership to his return and Rowena adds baby bonus income for their two small children to her return. Although the Wallaces opted for an equal division arrangement, couples can set down any percentage arrangement in their partnership as long as they can justify the split to tax officials. Rowena Wallace said she and Bill share the daily milking chores and the field work, although with a baby, Mrs. Wallace said lately she's been on "maternity leave." Mr. Wallace does the machinery repairs PG. 8 THE Rowena Wallace holding daughter Melissa, and husband, Bill, with son Ethan. and his wife the book work, and they employ extra labour during planting, swathing and combining. Although the children go to the barn with them for milking, the couple hires a babysitter for the days they're doing field work. From their own experiences in the partnership arrangement, the couple have some tips for anyone else considering a similar agreement. The most important thing is to consult both an accountant and tax specialist. Rowena Wallace said, "have him set up some guidelines and know what you want before going into the lawyer's office. The couple also recommends agreeing between yourselves on the percentage breakdown you want before going into the lawyer's office. While they haven't encountered any problems yet with the partnership. the couple said they've been warned problems could arise if they decided to dissolve the agreeement. Bill Wallace cautioned that lie understands once you have a partnership agreement, "you're stuck with it." Since buying the dairy farm. the couple have taken part in programssponsored by Centralia College of Agricultural Technology (CCAT) which has assisted them in making future plans for the farm, The Wallace farm was used as a project farm by six agricultural students who studied the operation for one year, going over the books in detail, suggesting changes in the farming operation and finally making a detailed oral report on suggestions for future improvements in the operation. Bill Wallace said they decided to volunteer as a project farm since "having gone through agricultural college ourselves we felt it was a way of paying back the people who spent time with us." RURAL VOICE/SEPTEMBER 1979 One of their recommendations was that the Wallaces erect a windbreak on the farm to overcome a snow problem and also build a calf nursery. which the Wallaces had already planned to do. Bill Wallace said the students also put a number of his ideas on future plans for the farm into their final report. In addition to their farm chores, the Wallaces have also spent many hours renovating their unique home - a log house, the former Williams homestead, which they believe is over 150 years old. In the couple's livingroom, the beautiful rough hewn logs are exposed, and the room is furnished with refinished antique furniture. One of the trickier parts of the renovation was finding someone who could tell the couple how to properly fix the chinking between the logs. Bill Wallace said people driving by the home'often drop in to ask about renovating a log house. With their partnership still less than two years old. the Wallaces haven't found any major disadvantages to the arrangement. The one problem they've encountered is with insurance. Since the couple split the total income from the farm and insurance is based on income, if one of them were injured in a farm accident, the benefits they'd be entitled to receive are much lower. Since forming their partnership, Bill and Rowena Wallace have run into a number of other couples who've made the same move - "the tax benefits are so great, they're foolish not to," said Rowena. After decades of couples sharing the workload on the farm, now they're sharing the financial returns (or even losses) as well.