Jennifer Nash is a plumber in Waterloo, Ontario, who spends all of her weekends and holidays operating a farm she purchased this year. She is confident that within two years her farm will be making a profit. In the current year, the farm had a loss of $18,000.
Any loss that is not deductible in the current year can only be applied to the extent of farm income in the carry over year.

Question

Quizplus · Accepted Answer

This statement is true. Any loss that is not deductible in the current year can be carried forward to the following year, but can only be applied to the extent of farm income in that year. This is known as the restricted farm loss rule.

Jennifer Nash Is a Plumber in Waterloo, Ontario, Who Spends