What are the qualifications for the FONCE exemption?

Two criteria must be met in order to qualify for the FONCE exemption:

  • At least 95 percent of the entity's ownership must be held by family members, and
  • Substantially all (66.67 percent) of the activity of the entity is either:
    • The production of passive investment income or
    • The combination of the production of passive investment income and farming
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