T2042 Forms: 1  
Federal forms: 

Protected B when completed
 
Statement of Farming Activities T2042
 
  • Use this form to calculate your self-employment farming income.
  • For each farming business, fill in a separate Form T2042.
  • Fill in this form and send it with your income tax and benefit return.
  • For more information on how to fill in this form, see guide T4002, Self-employed Business, Professional, Commission, Farming, and Fishing Income.

Part 1 - Identification
                       
Your name Demo EachTax     Your social insurance number    123456789
Farm name   Business number (15 characters)  
Farm address   City, province or territory   Postal code
   
Fiscal period
From:
  To:   Was 2023 your last year of farming?   Yes  No
Main product or service   Industry code (6 digits)  (look up here)
(see Chapter 2 in Guide T4002)
 
Tax shelter identification number     Partnership business number (9 digits)  
Accounting method Cash  Accrual   Your percentage of the partnership   %
Name of preparer  
Address of preparer  
 

Part 2 - Internet business activities
 
If your webpages or websites generate farming income, fill in this part of the form.
                     
How many Internet webpages and websites does your business earn income from? Enter "0" if none.
 
Provide up to five main webpage or website addresses:
 
http://
 
http://
 
http://
 
http://
 
http://
 
Percentage of your gross income generated from the webpages and websites.
(If no gross income was generated from the Internet, enter "0")
%
 
 

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  Protected B when completed
Part 3 - Income
               
Wheat 9371
Oats 9372
Barley 9373
Mixed grains 9374
Corn 9375
Canola 9376
Flaxseed 9377
Soya beans 9378
Grains and oilseeds 9370
Fruit 9421
Potatoes 9422
Vegetables (excluding potatoes) 9423
Tobacco 9424
Other crops 9420
Greenhouse and nursery products 9425
Forage crops or seeds 9426
Livestock sold
Cattle 9471
Swine 9472
Poultry 9473
Sheep and lambs 9474
Livestock and animal products revenue 9470
Milk and cream (excluding dairy subsidies) 9476
Eggs for consumption 9477
Other commodities 9520
Program payments
Dairy subsidies 9541
Crop insurance 9542
Other payments 9540
Rebates 9570
Custom or contract work (includes machine rentals) 9601
Insurance proceeds 9604
Patronage dividends 9605
Other income (Specify) *
Fuel charge tax credit for farmers
Total other income 9600  
 
Gross income - Total of above lines (enter this amount on line 14099 of your income tax and benefit return) 9659
 
* You may have received assistance from COVID-related measures from the federal, provincial or territorial governments. For more information on how to report COVID-related assistance, go to canada.ca/en/revenue-agency/services/wage-rent-subsidies/report-subsidy-tax-return.html.
 

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  Protected B when completed
Part 4 - Net income (loss) before adjustments
 
Gross income (line 9659 of Part 3)  4A 
                   
Expenses (enter only the business part)
  Containers and twine 9661
  Fertilizers and lime 9662
  Pesticides (herbicides, insecticides, fungicides) 9663
  Seeds and plants 9664
  Feed, supplements, straw, and bedding 9711
  Livestock purchased 9712
  Veterinary fees, medicine, and breeding fees 9713
  Machinery expenses
- Repairs, licences, and insurance 9760
- Gasoline, diesel fuel, and oil 9764
  Building and fence repairs 9795
  Clearing, levelling, and draining land 9796
  Crop insurance 9797
  Custom or contract work, and machinery rental 9798
  Electricity 9799
  Heating fuel 9802
  Insurance program overpayment recapture 9803
  Other insurance 9804
  Interest 9805
  Office expenses 9808
  Legal and accounting fees 9809
  Property taxes 9810
  Rent (land, buildings, and pasture) 9811
  Salaries, wages, and benefits (including employer's contributions) 9814
  Motor vehicle expenses (not including CCA) (amount 16 of Chart A) 9819
  Small tools 9820
  Mandatory inventory adjustment included in 2022 9937
  Optional inventory adjustment included in 2022 9938
  Other expenses (specify):
 
 
 
  Total other expenses (see Area A, column 7, on page 5) 9790  
  Subtotal of expenses (line 9661 to 9790)  4B 
  Capital cost allowance (CCA). Enter amount ii of Area A minus any personal part and any CCA for business-use-of-home expenses 9936
  Total farm expenses: Amount 4B plus line 9936 9898  
  Total of all expenses incurred in a non-arm's length transaction in Part 4 of Form T2042 (see Form T2043 as well)
 
Net income (loss) before inventory adjustments: Amount 4A minus line 9898 9899
Optional inventory adjustment included in the current year 9941
Mandatory inventory adjustment included in the current year 9942
Net income (loss) after inventory adjustments: Total of lines 9899, 9941 and 9942  4C 
 

Part 5 - Your net income (loss)
Your share of the amount 4C or the amount from your T5013 slip, Statement of Partnership Income  5A 
Return of fuel charge proceeds to farmers tax credit allocated to you in the year (amount 5C of Form T2043, Return of Fuel Charge Proceeds to Farmers Tax Credit)
(Software Note: If the amount is reported on a T5013 slip, please enter it on T5013 instead of here. If the amount is provided by your partnership in a letter rather than a T5013, please enter it on line 9951 here and leave box 237 of T5013 blank.)
9951
GST/HST rebate for partners received in the year 9974   
Total: Amount 5A plus line 9951 plus line 9974    5B 
Other amounts deductible from your share of net partnership income (loss) (from Part 6) 9943
Net income (loss) after adjustments: Amount 5B minus line 9943  5C 
Business-use-of-home expenses (amount 7P) 9945
Your net income (loss): Amount 5C minus line 9945 (enter this amount on line 14100 of your income tax and benefit return) 9946
                   
 

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  Protected B when completed
Part 6 - Other amounts deductible from your share of net partnership income (loss) Claim expenses you incurred that were not included in the partnership statement of income and expenses, and for which the partnership did not reimburse you. These claims must not be included in the claims already calculated for the partnership.
 
List details of expenses Expense amounts  
Total (enter this amount on line 9943 of Part 5)

Part 7 - Calculating business-use-of-home expenses
Heat    7A 
Electricity  7B 
Insurance  7C 
Maintenance  7D 
Mortgage interest  7E 
Property taxes  7F 
Other expenses (specify):  7G 
Subtotal: Add amounts 7A to 7G  7H 
Personal-use part of the business-use-of-home expenses  7I 
Subtotal: Amount 7H minus amount 7I  7J 
Capital cost allowance (business part only), which means amount ii of Area A minus any portion of CCA that is for personal use or entered on line 9936 of Part 4.  7K 
Amount carried forward from previous year  7L 
Subtotal: Add amounts 7J to 7L  7M 
Net income (loss) after adjustments (amount 5C) (If negative, enter "0")  7N 
Business-use-of-home expenses available to carry forward: Amount 7M minus amount 7N (If negative, enter "0")  7O 
Allowable claim: Amount 7M or 7N above, whichever is less (enter your share of this amount on line 9945 of Part 5)  7P 
               

Part 8 - Details of other partners Do not fill in this chart if you must file a partnership information return.
(Do not enter information of yourself.)
Last name First name Address Share of net income
or (loss) $
Percentage of
partnership
 
           

Part 9 - Details of equity
Total business liabilities 9931
Drawings in the current year 9932
Capital contributions in the current year 9933
       

Line 67090 (T2039) - Air quality improvement tax credit allocated to you in the year
               
Air quality improvement tax credit allocated to you in the year
(reported in box 238 of T5013 slip or in a letter)
Note:
This credit is government assistance received immediately before the end of the tax year it relates. If the credit is received for the acquisition of a depreciable property, the capital cost (column 3 of Area B or C of this form) of the property is reduced by the amount of the assistance. For more information, read "Grants, subsidies, and rebates" under section "Special situations" in Chapter 4 of Guide T4002, Self-employed Business, Professional, Commission, Farming, and Fishing Income.
Software Note:
If the amount is reported on a T5013 slip, please enter it in box 238 of T5013 instead of here. If the amount is provided by your partnership in a letter rather than a T5013, please enter it on line 67090 here and leave box 238 of T5013 blank.
67090
 
 

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  Protected B when completed
Area A - Calculation of capital cost allowance (CCA) claim
Software Note
  • Please enter only one entry per each class (number).
  • If there are equipment/building additions/dispositions in Area B, C, D and E, please ensure there is one (and only one) entry in Area A with matching class number for each class number in Area B, C, D and E. The software calculates based on matching class numbers.
  • To claim less than the calculated CCA, please override the calculated amount in column 18 per each class in Area A.

1
Class number
2
Undepreciated capital cost (UCC) at the start of the year
3
Cost of additions in the year
(see Areas B and C below)
4
Cost of additions from column 3 that are DIEPs (property must be available for use in the year)
Note 1
5
Proceeds of dispositions in the year
(see Areas D and E below)
6
Proceeds of dispositions of DIEP (enter amount from col. 5 that relates to DIEP from col. 4)
7**
UCC after additions and dispositions
(col. 2 plus col. 3 minus col. 5)
8
UCC of DIEP (col. 4 minus col. 6)
Note 2
9
Immediate expensing amount for DIEPs
Note 3
10
Cost of remaining additions after immediate expensing (col. 3 minus col. 9)
 
Total immediate expensing claim for the year: Total of column 9  i 

11
Cost of remaining additions from column 10 that are AIIPs or ZEVs
Note 4
12
Remaining UCC after immediate expensing (col. 7 minus col. 9) If negative, enter "0"
13
Proceeds of dispositions available to reduce additions of AIIPs and ZEVs (col. 5 minus col. 10 plus col. 11). If negative, enter "0"
Note 5
14
UCC adjustment for current-year additions of AIIPs and ZEVs (col. 11 minus col. 13) multiplied by the relevant factor. If negative, enter "0"
Note 6
15
Adjustment for current year additions subject to the half-year rule.
1/2 multiplied by (col. 10 minus col. 11 minus col. 5).
If negative, enter "0"
16
Base amount for CCA
(col. 12 plus col. 14 minus col. 15)
17
CCA
rate
%
18
CCA for the year
(col. 16 multiplied by col. 17 or a lower amount, plus col. 9)
19
UCC at the end of the year
(col. 7 minus col. 18)
 
Total CCA claim for the year  ii 
Personal part of the CCA and any CCA for business-use-of-home expenses***  -
Business part of the CCA claim for the year (enter the amount on line 9936 of Part 4)  =
** If you have a negative amount in column 7, add it to income as a recapture in Part 3C on line 8230. If no property is left in the class and there is a positive amount in this column, deduct the amount from income as a terminal loss in Part 4 on line 9270. Recapture and terminal loss do not apply to a Class 10.1 property unless it is a DIEP. For more information, read Chapter 3 of Guide T4002.
*** For information on CCA for "Part 7 Calculating business-use-of-home expenses," see "Special situations" in Chapter 4 of Guide T4002. To help you calculate the CCA, see the calculation charts in Areas B to H.
       

 

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  Protected B when completed
Note 1 Columns 4, 6, 8 and 9 apply only to designated immediate expensing properties (DIEPs). See subsection 1104(3.1) of the federal Income Tax Regulations for definitions. A DIEP is a property that you acquired after December 31, 2021, and that became available for use in the current year. For more information, see Guide T4002.
Note 2 The proceeds of disposition of a zero-emission passenger vehicle (ZEPV) that has been included in Class 54, or a passenger vehicle bought after April 18, 2021, that has been included in Class 10.1, and whose cost is more than the prescribed amount will be adjusted based on a factor equal to its prescribed amount as a proportion of the actual cost of the vehicle. For dispositions after July 29, 2019, you will have to adjust the actual cost of the vehicle for any payments or repayments of government assistance that you may have received or repaid for the vehicle. If the passenger vehicle in Class 10.1 is not designated for immediate expensing treatment, this special rule does not apply. For more information on proceeds of disposition and prescribed amounts, read "Class 10.1 (30%)" and "Class 54 (30%)" in Guide T4002.
Note 3 The amount you enter in column 8 must not be more than the amount in column 7. If the amount in column 7 is negative, enter "0."
Note 4 The immediate expensing applies to DIEPs included in column 8. The total immediate expensing amount for the tax year (total of column 9) is limited to the lesser of:
  • the immediate expensing limit, which is equal to one of the following, whichever is applicable:
    • $1.5 million, if you are not associated with any other eligible person or partnership (EPOP) in the tax year
    • amount iv of Area G, if you are associated with one or more EPOPs in the tax year
    • zero, if you are associated with one or more EPOPs and an agreement that assigns a percentage to one or more of the associated EPOPs was not filed with the minister in a prescribed form
    • any amount allocated by the minister under subsection 1104(3.4) of the Regulations
  • the UCC of DIEPs in column 8
  • the amount of income, if any, earned from the source of income that is a property (before any CCA deductions) in which the relevant DIEP is used for the tax year
For more information, see Guide T4002.
Note 5 Columns 11, 13 and 14 apply only to accelerated investment incentive properties (AIIPs) (see subsection 1104(4) of the federal Income Tax Regulations for the definition), zero-emission vehicles (ZEVs), ZEPVs and other eligible zero-emission automotive equipment and vehicles that become available for use in the year. In this chart, ZEVs represent zero-emission vehicles, zero-emission passenger vehicles and other eligible zero-emission automotive equipment and vehicles. An AIIP is a property (other than a ZEV) that you acquired after November 20, 2018, and that became available for use before 2028. A ZEV is a motor vehicle included in Class 54 or 55 that you acquired after March 18, 2019, and that became available for use before 2028, or eligible zero-emission automotive equipment and vehicles included in Class 56 acquired after March 1, 2020, and that became available for use before 2028. For more information, see Guide T4002.
Note 6 The relevant factors for properties available for use before 2024 are 2 1/3 (Classes 43.1, 54 and 56), 1 1/2 (Class 55), 1 (Classes 43.2 and 53), 0 (Classes 12, 13, 14 and 15) and 1/2 for the remaining AIIPs.
 
For more information on AIIPs, see Guide T4002 or go to canada.ca/taxes-accelerated-investment-income.
       
Part XVII properties (acquired before 1972)
1
Year acquired
2
Kind of property
3
Month of disposition
4
Cost (business part)
5
Rate
(%)
6
CCA for this year
7
Total CCA for this and previous years
 
Enter the total of amounts ii and iii on line 9936 of part 4. Total CCA on Part XVII properties  iii
                 
Area B - Details of equipment additions in the year
1
Class number
2
Property details
3
Total cost
4
Personal part
(if applicable)
5
Business part
(column 3 minus column 4)
 
Total equipment additions in the year 9925
Area C - Details of building additions in the year
1
Class number
2
Property details
3
Total cost
4
Personal part
(if applicable)
5
Business part
(column 3 minus column 4)
 
Total building additions in the year 9927
 

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  Protected B when completed
Area D - Details of equipment dispositions in the year
1
Class number
2
Property details
3
Proceeds of disposition
(should not be more than the capital cost)
4
Personal part
(if applicable)
5
Business part
(column 3 minus column 4)
 
Total equipment dispositions in the year 9926
Note: If you disposed of property from your farming business in the year, see Chapter 3 of Guide T4002 for information about your proceeds of disposition.
 
Area E - Details of building dispositions in the year
1
Class number
2
Property details
3
Proceeds of disposition
(should not be more than the capital cost)
4
Personal part
(if applicable)
5
Business part
(column 3 minus column 4)
 
Total building dispositions in the year 9928
Note: If you disposed of property from your farming business in the year, see Chapter 3 of Guide T4002 for information about your proceeds of disposition.
 
Area F - Details of land additions and dispositions in the year
Total cost of all land additions in the year 9923
Total proceeds from all land dispositions in the year 9924
       
Note: You cannot claim capital cost allowance on land. For more information, see Chapter 3 of Guide T4002.

Area G - Agreement between associated eligible persons or partnerships (EPOPs)
 
Are you associated in the fiscal period with one or more EPOPs that you have entered into an agreement with under subsection 1104(3.3) of the Regulations? Yes  No
 

If you answered yes, fill in the table below.

Enter the percentage assigned to each associated EPOP (including your business) as determined in the agreement.

This percentage will be used to allocate the immediate expensing limit. The total of all percentages assigned under the agreement should not be more than 100%. If the total is more than 100%, then the associated group has an immediate expensing limit of zero. For more information about the immediate expensing limit, see Guide T4002.

       
1
Name of the EPOP
2
Identification number
Note 7
3
Percentage assigned under the agreement
(%)
 
Total of percentage assigned: Total of column 3 
       
Immediate expensing limit allocated to your business: Multiply 1.5 million by the percentage assigned to your business in column 3 (see note 8) . iii
         
 
Note 7: The identification number is the EPOP's social insurance number, business number or partnership account number.
Note 8: If the total of column 3 is more than 100%, enter "0".
 
 
 
Area H - Details of quota additions and dispositions in the year
Total cost of all quota additions in the year 9929
Total proceeds from all quota dispositions in the year 9930
       
Note: All quotas are eligible capital property. For more information, see Chapter 4 of Guide T4002.
 

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  Protected B when completed
Chart A - Motor Vehicle Expenses
Kilometres you drove in the tax year to earn farming income 1
Total kilometres you drove in the tax year 2
   Fuel and oil 3
   Interest (use Chart B below) 4
   Insurance 5
   Licence and registration 6
   Maintenance and repairs 7
   Leasing (use Chart C below) 8
   Electricity for zero-emission vehicles  9 
   Other expenses (specify) 10
   11
   Total motor vehicle expenses: Add amounts 3 to 11 12
                       
   Business-use part: amount 1:  ÷ amount 2:   x amount 12: = 13
 
   Business Parking Fees 14
   Supplementary Business Insurance 15
Allowable motor vehicle expenses: Add amounts 13 to 15 (enter this total on line 9819 of Part 4) 16
Note: You can claim CCA on motor vehicles in Area A.
 
 
Chart B - Available interest expense for passenger vehicles
Total interest payable (accrual method) or paid (cash method) in the fiscal period 17
   $10****  X  the number of days in the fiscal period for which interest was payable (accrual method) or paid (cash method) = 18
 
Available interest expense: Amount 17 or 18, whichever is less (enter in amount 4 of Chart A above).   19
                 
**** For passenger vehicles bought after 2000.
 
 
Chart C - Eligible leasing costs for passenger vehicles ****
                         
Total lease charges incurred in your current fiscal period for the vehicle  20 
Total lease payments deducted before your current fiscal period for the vehicle  21 
Total number of days the vehicle was leased in your current and previous fiscal periods  22 
Manufacturer's list price  23 
 
Year that the leases were entered into (see note 9, 10 and 11)   
 
Use a GST rate of 5% or HST rate applicable to your province.   
 
Amount 23 or ($42,353 + GST and PST, or $42,353 + HST), whichever is more (see note 9)
$  x 85% =  24 
 
[($950 + GST and PST, or $950 + HST)] (see note 10)
($  x amount 22) ÷ 30 =  25 
Amount 25: -   amount 21: =  26 
 
[($36,000 + GST and PST, or $36,000 + HST)] (see note 11)
$  x amount 20 = ÷ amount 24: =  27 
 
Eligible leasing cost: Amount 26 or 27, whichever is less (enter in amount 8 of Chart A above)    28 
**** Includes a vehicle that would qualify as a zero-emission passenger vehicle if you owned it.
 
         
Note 9: For leases entered into in 2022, it's amount 23 or ($40,000 plus GST and PST, or HST on $40,000), whichever is more. For leases entered into before 2022, it's amount 23 or ($35,294 plus GST and PST, or HST on $35,294, whichever is more.
Note 10: For leases entered into in 2022, amount 25 is equal to [($900 plus GST and PST, or $900 plus HST) multiplied by amount 22], divided by 30. For leases entered into before 2022, amount 25 is equal to [($800 plus GST and PST, or $800 plus HST) multiplied by amount 22], divided by 30.
Note 11: For leases entered into in 2022, amount 27 is equal to [($34,000 plus GST and PST, or $34,000 plus HST) multiplied by amount 20], divided by amount 24. For leases entered into before 2022, amount 27 is equal to [($30,000 plus GST and PST, or $30,000 plus HST) multiplied by amount 20], divided by amount 24.