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Zurich Citizens News, 1973-05-17, Page 6PAGE s Tax break for farmer Farmers continually adding to their livestock inventories have received a major income tax concession from the federal government in the form of an expansion to the old limit on the "loss carry forward" provis- ion. The loss carry forward prove ision is still available, but there is now the option of deleting livestock expenses in any one year and then reapplying them in any future year that may be beneficial to the farmer's over- all tax position, says Gary Hut- chison, Department of Continu- ing Education, University of Guelph. The new tax provision, which became effective April 18, 1973, is retroactive to the beginning of the 1972 tax year. In the past, business losses of one year could be carried back one year or forward five years to offset an otherwise taxable income. (A loss in 1968 could offset part or all of a tax- able income in 1972). Many farmers, however, are contin- ually increasing livestock inv- entories and are in a loss posit- ion for more than five years, This has meant that the loss carry forward provision could not be fully exercised, because of the time restriction, and yet the total inventory would be subject to tax when sold. To overcome this hardship, the federal government is now allowing farmers to hold live- stock purchases out of expenses in any given year; and is perm- itting these purchases to be brought back into expenses at any time, the next year o: even 20 years hence. An example may best expl- ain this new concept. A farmer decides to expand in any given year by purchasing the 100 -acre farm next door. His costs include riling, fencerow clearing, barn renovations, and other necessary items. While these expenses alone may reduce his otherwise taxable income to zero, he also purchases 75 steers at an addit- ional cost of $20, 000 or any part, off to the side with a note to the tax people to that effect. If, the following year or even 10 years later, the farmer earns $15, 000 worth of taxable in- come, $15, 000 of the $20, 000 livestock inventory cost can be brought into expenses to offset the taxable income. The flexibility of this ruling is far greater than the old Basic Herd provision and is superior to the old five- year loss carry forward provisionpreviously mentioned. Livestock farmers wishing to revise their 1972 income rax return to take advantage of the new ruling should obtain a 1972 Individual Tax Return form from their local post office and fill it in, declaring their intent- ion to withhold from expenses any livestock inventory purch- ases made in 1972. It is important to remember that livestock is the only agric- ultural commodity affected by the new federal tax ruling. MACHINERY SHORTAGE For the first time in a number of years, there is a shortage of most farm machinery and re- placement parts, says IIal Wrigle secretary -manager of the Farm Machinery Board. The reasons for the shortage, which will probably extend throughout the 1973 season, are complex. Sales of farm machinery were up to 20 to 25 percent in 1972, which helped clear up stocks at dealerships and distribution centres. This year as well, 4 - million acres of land has been released for production in the United States; an area equal to about half the entire cropland in Ontario. Such production will require more equipment from machinery companies. due tet the fantastic success of our WE ARE EXTENDING IT H Di tarp i e Drop in for refreshments at both locations ! COMPARE OUR LOW, LOW PRICES Gingerich's ZURICH 236-4351 Furniture Asad Appliances SEAFORTH 527-0290 ZURICH CITIZENS NEWS THURSDAY, MAY 17, 1973 NOW IN STOCK AT THE ZURICH CITIZENS NEWS METAL ILIN CABINETS COMMODORE QUALITY FILING CABINETS FULL 24 FOUR -DRAWER TWO -DRAWER 6930 (without lock) $42.00 (with lock) OR POPULAR 18" DEPTH 62.95 4 -drawer WITH LOCK — Personal File — Designed for home or salesmen's files — portable with sturdy metal carrying handle and lock. Complete with divider and set of indexed file folders. Measures — 125/4" x 101/e" x 10". Only $5,,95 Each commodore COMPLETE OFFICE -IN -ONE UNIT FOR HOME OR OFFICE Oil y $69.95 Compact and cleverly arranged Just 29" wide x 18" deep x 42" high. Locking drop -front provides a 13'/2" x 271/2" typewriter or utility table. Main upper cupboard offers suspended stationery rack plus ample space for account ledgers or stationery. Below you will find two 51/2" deep utility drawers plus one letter -sized filing drawer, all smoothly mounted on nylon rollers for quiet operation. In addition there is a locking storage cupboard 14" wide x 17" deep x 25" high with one adjustable steel shelf. Finest heavy gauge steel. Baked enamel finish AVAILABLE NOW AT Lru©�6.:(47/4_ wyo