What is a restricted farm loss?

Restricted Losses
It's farm losses you can claim, but you must be a full-time farmer. If farming was not your primary source of income, you can only claim a portion of your losses.

If your farm losses exceed $32,500 and you are a part-time farmer, you can claim $17,500 as a farm loss against income for the year.

If your farm losses are less than $32,500, the Canada Revenue Agency(CRA) requires you to complete this formula: $2,500 +.5 × (your net farm loss – $2,500).

For example, if your farm losses are $20,000, the result of $2,500 + .5 x ($20,000 – $2,500) is $11,250. Because $11,250 is less than your farm losses, that is the amount you report as your loss.

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TurboTax Understanding Farm Losses

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