Farm Industry Trends
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Use a CRT for Retirement Income – Updated
In my post yesterday, I need to clarify one tax aspect of the post. When a farmer contributes all ordinary income assets such as unsold grain, farm equipment, etc. the deduction that the farmer may get is limited to his cost basis in the assets. Since unsold grain for a cash basis taxpayer has a […]
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Use a CRT for Retirement Equipment Sales
We had a reader ask the following question: “Is there any way to reinvest money from the sale of equipment(retirement) rather than pay ordinary income tax on it?” Most farmers when they retire have a large amount of income from selling the final crop and their equipment and many times very little expenses to offset […]
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Get Ready For Payroll Tax Teeter-Totter
With the wrangling over the extension of the payroll tax between the House, Senate and President, we may not know if the payroll tax cut is in place on January 1, 2012 or not. There is a chance that the extension of the law may occur early in 2012 and be retroactive to January 1, […]
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What Happens If I Don’t Know My Cost Basis
We had a reader ask the following question: “How do you prove what you paid for an land asset that is subject to capital gain purchased long ago if no records exist? The land deed only shows the deed tax paid at the recorders office with no stated value.” Although the requirement for keeping records […]
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Year-end Equipment Flexibility
We had a reader ask the following question: “If I purchase and take delivery of a tractor in December 2011 but do not want any of the depreciation until 2012 can I still get the section 179 and bonus depreciation in 2012?” In order to depreciate equipment such as this tractor in 2011, the farmer must both purchase […]
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Will We See 100% Bonus Depreciation in 2012?
We had a reader ask the following question: “President Obama’s proposed Jobs Act includes an extension of 100% bonus depreciation through 2012 however excludes qualified real property. Does this include farm buildings?” First, I think there is a very good chance that we will see 100% bonus depreciation sometime in 2012. However, we are dealing […]
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DTN AG Summit – Day 2
I have already written a previous post on one of the first sessions at DTN AG Summit yesterday, but here is my recap of the rest of the day. The president of International Farming Corporation gave a presentation on their efforts to both create long-term value to their investors and their tenant farmers. This is […]
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It May Be More Important To Not Overpay for Land Than Have Too Much Leverage
Two speakers from Kansas State Univeristy indicated that overpaying for land in their analysis was more likely to be more harmful to a farm operation than having too much leverage. Their bottom line objectives for their land buying decisions in 2011 is that the perceived land rent value should be at least 4.50% of the […]
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DTN AG Summit – Day 1
I attended most of the afternoon session of the first day of the DTN AG Summit in Chicago. There appeared to be around 600 Agri-business leaders there of which about half were farmers. The potential slowdown in economic growth in China may negatively affect the American farmer in 2012. Although growth of 4-5% would be […]
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Some Questions on Section 179
We had a reader ask the following question: “Do I have to take 100% of the cost of property when oping for the section 179 depreciation, or am I also allowed to take any % less and then use normal depreciation for the remainder? Also if it is placed in service in 2011 and paid […]