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The Rural Voice, 1983-07, Page 329witea SeWoad R.O.P. TESTED SHEEP 1982 RECORD GAINING RAM SOLD TO JOHN SCOTT JR. WEST VIRGINIA We are consigning top quality rams and ewes to the O.S.S.A. and R.O.P. Sale at SHEEP FOCUS '83, Markham, July 15 & 16. Visitors and Enquiries Welcome MURRAY & NANCY EMKE, R.R. 1, ELMWOOD. ONT. NOG 1S0 519-364-5087 "Quality Breeds Quality" ENEIMM-GUEST COLUMN Do not pay your wife That is my advice to any farmer even though his wife may have fed 50 sows this morning; helped to castrate and take the needle teeth out of 100 piglets yesterday; drove 300 km. last summer to pick up parts that saved $2,000 worth of wheat; worked with the accountant and the bankers; prepared meals for five tiling men for a week last fall; cleaned all the hatching eggs individually with sand paper years ago when they had hens; hauled the grain away from the combine and ran the auger; looked after the small sow-weaner operation years ago when he worked off the farm; working in the bank for several years before the marriage and before the children arrived contributing more than the husband to the down payment on the farm and such little things as raising four children almost single handed. Before my telephone starts to ring, let me explain my position. In the past, all the farm income was considered to have accrued to the husband regardless of who contributed to the income. Now it is possible to treat the female spouse as an employee. This may appear quite in order ESTABLISHED 1873 howick MUTUAL INSURANCE COMPANY Wroxeter, Ontario NOG 2X0 Specializing in Farm and Residential property insurance. Tel. (519)-335-3561 Agents: -Brown Insurance Brokers, Palmerston -Cardiff & Mulvey R.E. & Ins. Ltd., Brussels -Edward Elliott Insurance, Wingham -Elliott Ins. Brokers Ltd., Blyth -Gaiser-Kneale Ins. Brokers Inc., Clinton -Vern Hargrave Ins. Broker, Dundalk -Johnson-Dadson Ins. Inc., Listowel -Keil Ins. Brokers Ltd., Gorrie & Wingham -Bryan Lavis Ins. Broker Ltd., Clinton -McDonagh Ins. Broker Ltd., Lucknow -Lyons & Mulhern Ins. Brokers, Goderich -Harold Robinson, Gorrie -Glenn Warren Ins. Brokers Ltd., Clifford & Hanover -Wylie Ins. Brokers Ltd., Gorrie & Harriston All claims should be reported promptly to the representative in your area to the Head Office in Wroxeter. or PG. 30 THE RURAL VOICE, JULY 1983 to allow her to pay Canada Pension and allow the farm to effectively split the income. However, no female spouse who has contributed labour, management or capital to the farm should be content to be just an employee. You may receive as much in wages as you would as a partnership share. However, when the farm is eventually shut down, all the employees are terminated and all the income is taxed 100 per cent in the husband's name. If a partnership exists, every dollar of taxable income is split in whatever ratio is in effect in the partnership at the time of liquidation. The wife's entitlement to Canada Pension payments would be the same whether she had received a wage or had been a partner in the business. A written partnership on the farm business would also mean more than just one half the personal assets, should a separation take place. The present family law does not provide the female spouse necessarily with any of the business assets. How do you establish a spousal partnership? In the past the law forced the farm to be fully taxed in the husband's name regardless of the wife's contribution. It is now necessary to convince the tax department the farm should have been taxed as a partnership. The only way to do this is to trace the specific labour, management and capital commitments of the wife in each time period. This may include monies brought into the marriage, the inheritance used to help buy the new farm or the fact the wife milked once a day many years ago while the husband worked shifts. Do not belittle the wife's contribution to the books, the banking and the endless "gopher" jobs of picking up supplies. Contributions vary over the years, but considered collectively it is possible to arrive at a realistic partnership interest. A detailed list or description of ,the female spouse's contributions of labour, management and/or capital should be set out on paper as well as the partner- ship interest each party is entitled. A copy of such must accompany each spouse's tax return the first year the partnership is in effect. It is quite in order to date a partnership agreement effective January 1, for the past tax year. ❑ Gary Hutchison teaches at the University of Guelph and is a farm consultant specializing in taxes and finance. He also runs a sizable beef feedlot at R.R. 2, Belwood, Ontario.