Income Tax Regulations

1802 (1) Except as provided in subsection (2), a taxpayer who is carrying on a business that includes the breeding and raising of animals may elect in prescribed form for a taxation year and subsequent taxation years to value each animal of a particular species (except a registered animal, an animal purchased for feedlot or similar operations, or an animal purchased by a drover or like person for resale) included in his inventory in respect of the business at a unit price determined in accordance with this section.

(2) An election made in accordance with subsection (1) may be revoked in writing by the taxpayer, but where a taxpayer has made a revocation in accordance with this subsection a further election may not be made under subsection (1) except with the concurrence of the Minister.

(3) The unit price with respect to an animal of a particular class of animal shall be determined in accordance with the following rules:

• (a) where animals of a particular class of animal were included in the inventory of a taxpayer at the end of the taxation year immediately preceding the first year in respect of which the taxpayer elected under subsection (1), the unit price of an animal of that class shall be computed by dividing the total value of all animals of the class in the inventory of the preceding year by the number of animals of the class described in that inventory; and

• (b) in any other case, the unit price of an animal of a class shall be determined by the Minister, having regard, among other things, to the unit prices of animals of a comparable class of animal used in valuing the inventories of other taxpayers in the district.

(4) Notwithstanding subsection (1), where the aggregate value of the animals of a particular class determined in accordance with that subsection exceeds the market value of those animals, the animals of that class may be valued at fair market value.

(5) In this section,

class of animal

class of animal means a group of animals of a particular species segregated on the basis of age, breed or other recognized division, as determined by the taxpayer at the time of election under this section; (catégorie d’animaux)

district

district means the territory served by a District Office of the Taxation Division of the Department of National Revenue; (district)

registered animal

registered animal means an animal for which a certificate of registration has been issued by the registrar of the breed to which the animal belongs or by the registrar of the Canadian National Livestock Records; (animal enregistré)

a reference to “taxation year” shall be deemed to include a reference to the fiscal period of a business.