Take Full Advantage of your Farm Corporation
Most farms I deal with are incorporated.
Make sure you know these three things to take full advantage of your farm corporation...
- There are some significant advantages to owning your life insurance within your corporation.
You can pay for the premiums using the lower tax rate of the corporation instead of yourself personally.
Also, at the death of the person who is life insurance the corporation gets the money, say $1,000,000 paid to it, then money goes out of a notional account, called a capital dividend account (CDA) to the beneficiary tax free.
Who doesn’t want $1,000,000 tax free?
- Opening a corporate retirement investing account.
You can open a corporate investing account and buy other investments to diversify away from the farm such as GIC’s, individual stocks like RBC, or Exchange Traded Funds.
However, make sure your corporation still is considered a qualified farm property, which is something I work with clients accountants on.
- Consider opening an IPP.
An IPP is short for an Individual Pension Plan.
IPP’s are ideally suited for farmers that are over 40 years old and want to start saving outside the farm.
Bottom line, make sure you are taking full advantage of your farm corporation.
Connect with us by clicking here