June, 2016
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Key Aspects of House Tax Reform Proposal for Farmers
The House Republicans issued a proposal last week detailing their plans for tax reform (likely to occur in 2017). The Tax Foundation has issued several articles on how this reform may affect business and individuals and I am going to recap what I see as the key aspects of their proposals. Farmers must be aware […]
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What? When? Who?
I am speaking at an event in Nevada, Iowa today on succession planning along with Jolene Brown. Jolene and her husband farm in SE Iowa but she also does seminars on succession planning for farmers and small businesses all over the country. One of her first slides had the audience ask the following questions: What? – […]
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FICA Wage Base Likely to be $126,000 in 2017
The Social Security Administration’s Office of the Chief Actuary has projected, based on two out of three of its methods of forecasting, that the 2017 FICA wage base will increase from $118,500 in 2016 to $126,000 in 2017. The current wage base subjects employee’s to maximum FICA tax of $7,328.40. If the new base goes […]
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Help – I Forgot to Take Depreciation
Many times we will be reviewing a farmer’s tax records and notice that the farmer forgot to take depreciation on an asset they placed in service several years ago. If they sell the asset, the Tax Code may force them to pretend that they took depreciation on the asset and report gain even though they […]
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Have you Locked in Positive Working Capital Changes
FarmDoc Daily issued a report on how recent crop price increases have improved working capital for the 2016 crop. The report went through the working capital changes for Central Illinois Lower Productivity Farmland assuming a 50/50 corn/soybean crop mix. The working capital changes were shown for owned, cash rent and crop share farmers on a […]
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Will You Be Able To Deduct Interest?
The House Republicans will release a blueprint on June 24 regarding their plans for a tax code overhaul. This plan includes the following major changes to the tax code: Reduce the corporate tax rate to 20% (from the current 35% rate). Allow 100% business expensing of capital purchases. Eliminate the interest deduction. This blueprint will […]
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Alaska – A Chance for Education and Vacation
I did a two-day seminar last week in Western North Carolina and this was my first trip to this part of the country. My wife and I then drove over to Nashville and went through the Smokey Mountains. This is a very beautiful part of the country. When we were headed into Chattanooga to spend the […]
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Long-Term AFR’s Hit All-Time Lows
The IRS issues the Applicable Federal Rates (AFR) each month. These rates are broken down into short-term (less than three years), mid-term (between 3 and 9 years) and long-term (more than 9 years). The IRS just issued the rates for July, 2016 and the long-term rate hit an all-time low of 2.18%. The old low […]
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Can My IRA Own Farmland?
We continue to get this question fairly often. A farmer has some excess cash in their IRA or retirement account and would like to purchase farmland since they feel this is a better investment than what they can get from the bank. Yes, they can do this, BUT, there are many potential drawbacks. First, they […]
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National Collaborative Farming Conference
Today, I spoke at the National Collaborative Farming Conference held in Nashville, Tennessee. My talk was on entity planning for collaborative farming, however, my post today is how some of these farming operations have been structured. Our first speaker was a farmer from Australia who originally farmed about 5,000 acres and found that he did not […]