The Rural Voice, 1983-12, Page 13ing statement for the year in order for
you to determine the maximum
amount that you could deduct on
your tax return. However, purchasing
the RRSP in the first two months of
the year will allow you to carry for-
ward any excess amounts contributed
to the following year. Tax on the in-
terest earned on the deposit will thus
be sheltered in the RRSP and will not
appear on your current year's tax
return as investment income.
You should also consider whether
you should make the payment to a
spousal RRSP. On retirement, the in-
come will then be taxed in the
spouse's hands which is another form
of income splitting.
At the other end of the spectrum, if
you have had a loss year, and have
livestock inventory on hand at
December 31st, ensure that you use
the 28(1) inventory election in order
that you will not lose your personal
deductions for the year. The inven-
tory election can be used to create in-
come in the year to get you to a level
where your personal exemptions are
used up but no tax is payable. The
amount elected can then be treated as
an expense in a future year when you
require it.
Remember during the tax return
preparation time that, although
general averaging is no longer with
us, the five year farm average can still
be used to smooth out the farm in-
come over five years. Forward
averaging has replaced general
averaging but should be treated very
cautiously. Do not elect under this
section unless your accountant has
fully explained the rare circumstances
where it should be used.
Those farmers, active or retired,
who are over 65 and who do not re-
quire the old age security and/or
Canada Pension cheques to live on,
might consider sheltering these
amounts in an RRSP until they reach
the age of 71.
As farmers generally do not have
other pension income, pension in-
come can be created for those of you
over 65 years of age. An annuity
could be purchased and the taxable
portion of payments received
therefrom could be classified as pen-
sion income and would be eligible for
the $1,000 pension income deduction
on your tax return. It should be noted
that RRSP's that have been turned in-
to an annuity would also be eligible
for this deduction if you were 65
years or older.
All of the above examples (other
than changing the form of your
organization) require minimal cash
outlays that are sure to bring savings
or deferrals of income tax. As with
other areas of your farming business,
planning ahead of time is the most
cost effective measure that you can
take. ❑
Prepared by Ronald E. Takalo, C.A.,
a partner in the Goderich office of
MacGillivray & Co., Chartered Ac-
countants.
PUREBRED
YORKSHIRES & LANDRACE
Bred gilts `+r
Boars
R.O.P. Tested
MAITLAND MANOR FARM
Blucvale, Ontario
Don Henry 335-32au
Bob Richardson 335-37h
Fall Season Clearance
NEW AND USED
New McKee 4 -row x 30" Row Crop Cultivator 51,499.
Used Vetter 15' Rotary Hoe 51,999.
Used M.F. 880 5 x 16" Semi -Mount 52,199.
Used Corn Hog Grinder w. Drag Feeder 51,499.
New Innes 570 Bean Windrower & Conveyor $6,499.
Used A.C. 4 -Row Rolling Scuffler 51,299.
Used Flexi Coil Packers 18' width $1,299.
Used I H 56 4 -row Planter w. Gandy, exc. $1,799.
Used A C 2000 5 x 18" Auto Reset, rebuilt $3,999.
Used Keverneland 5 x 16" Auto Reset "Make an Offer"
Used I H 844 4 x 36" Corn Head $4,999.
Used I H 843 4 x 30" Corn Head $5,299.
Used J.D. 350 5 x 16" Auto Reset, rebuilt $3,899.
Used Kongskilde 5 -furrow, Adjustable, Good $2,999.
Used I H 45 Vibra Shank 21' Hyd. Lift & Harrows $3,299.
Used A C 1200 18' Cultivator, Harrows 51,799.
Tractors and Combines
I H 5088D Radials, 3 Remotes "Demo" $42,999.
I H 1256D 18.4 x 38" Exc. $11,800.
I H 474D Nice Clean Unit $ 6,790.
White 1870D cab, 100 h.p $ 8,900.
I H 886D Cab, Air, New Tires $19,500.
A C M-2 Combine, Grain,4-row Corn Head,
only 907 hours, Super Buy 533,900.
I H 1440 Axial Flow, Fully Equipped $39,900.
Interest Free or 9.90/o Financing Available
C. A. Becker
Equipment Limited
Lucknow
519-529-7993
Evenings: Steve Donaldson
519-392-8254
KHD
DEUTZ
FAHR
THE RURAL VOICE, DECEMBER 1983 PG. 11