Farm Industry Trends
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Cattle Prices Are Posting New Highs
Cattle prices are now at record highs of around $1.36 per pound primarily due to herd liquidation caused by the drought in the American Southwest. Bloomberg has a good article on the reasons for the rally in cattle prices and it is anticipated that high prices will continue for some time. Unlike hogs or chickens […]
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What if I Don’t Reinvest?!
Our reader from yesterday’s post followed up with this question: “Follow- up on condemned highway tax problem. What happens when the proceeds are not reinvested in like find property?” When you receive proceeds from a condemnation of your farm land, you have three years to reinvest the proceeds to defer the capital gains on the […]
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Three Years to Reinvest Condemned Farm Land!
We had a reader ask the following question: “I have new state highway coming through one end of one farm. How is the money received taxed ? Do I have any options for reinvestment without paying tax.” Whenever, farmland is condemned (or threatened to be condemned) for a new road or other use, the tax […]
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What is Your Total Capital Gains Tax Rate?
We have gotten a couple of questions lately about what is the capital gains tax rate on the sale of farm land. To answer that question requires: How long have you owned the land, Is there equipment and fixtures attached to the land such as grain bins, fencing, etc. that you have taken depreciation on, […]
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Goodbye Pesky Logs for Cell Phone Use!
I am sure that all of our farm readers realized that a log of all of their cell phone usage up to December 31, 2009. This log was required to deduct the cost of the cell phone service and any personal use would either not be deductible or would have been included as part of […]
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Canadian Farmers Vote to Keep Monopoly!
Canadian wheat and barley farmers have a unique way of marketing their grain. Unlike the US where each farmer can determine their price each day by calling the elevator, the local ethanol plant and looking it up on the Internet, Canadian farmers belong to the Canadian Wheat Board which is a monopoly for these farmers. […]
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Land Is Not Deductible!
We had a reader ask the following question: “Can I or my s-corp deduct the purchase of farmland as a business expense?” The general answer to this question is no; you cannot deduct the cost of farmland as a business expense. However, you must review your purchase to determine if, in fact, you only purchased […]
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Watch For A State Capital Gains Deduction for Sale of Farm Assets
We had a reader ask the following question: “Does Iowa have a reduced capital gains tax rate on sale of farm land held for 15 years?” If certain qualifications are met such as holding the farmland or assets for at least 10 years and material participation in the farm (can not cash rent the land), Iowa […]
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Less Than Four Months to Get New Farm Buildings Finished
Farmers who are in the process of constructing new farm buildings or are thinking about it now have less than four months to go if they want to take advantage of 100% bonus depreciation and deduct all of the cost on their 2011 tax return. Remember, there is no loss limitations on this deduction unlike […]
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Depletion – The Larger of Cost or Percentage!
We had a reader ask the following question: “Hi, I just inherited a Kansas wheat farm with an oil well on it. I assume that I still get the 15% percentage depletion on the oil royalty. My question is do you know if I can “value” the oil and then take a larger cost depletion […]