Farm Leadership

  • Betterment – Why Does That Cost Me Money?

    We had a reader ask the following questions: “We had a combine fire this fall, and my question is concerning “betterment” deducted from the claim. The combine was a 2010 model, with only 400 hours on it. The damage exceeded $41,000, and the insurance company deducted $4,100 (10%) for “betterment”. I assume that I can deduct […]

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  • How Might a Rise In Interest Rates Affect Farmland Prices?

    With a lot of recent discussion and articles on whether farmland prices are entering a “bubble” phase, I thought some analysis to see how a potential rise in interest rates might effect farmland prices would look like. Farmland prices (as are most financial assets) is normally a function of the income generated by the farmland […]

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  • What is Your 20 Year Plan?

    I was skimming the Corn and Soybean Digest website the other day and came across this very good article on planning ahead for the next 20 years on your farm operation. It is very important for farmers to set goals and plans.  I believe that these goals should be in writing and quantifiable.  Also, on […]

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  • When a Deposit Costs You Money?

    One of our readers sent us the following question: “If I prepay inputs for 2011, do I have to deduct them in 2010? Also, if I just need some of the expense this year can I deduct part of it? Thank you!” A farmer that uses the cash method of accounting (which is substantially all […]

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  • How to Handle Allocation of Purchase Price

    One of our readers wrote in the following question: “Our son is in the process of taking over our hog operation. They would like to buy all the buildings, equipment, and house on a contract. Do we need an appraisal for this transaction? Some of the buildings and equipment are 16 years old and fully […]

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  • Watch Your P’s & Q’s on Section 179

    Joe Kristan of Roth & Company, a CPA firm in Des Moines, Iowa writes a very good blog on income taxes and in one of his more recent posts, he recaps a case (Thomann TC Memo 2010-241) where a farmer attempted to take Section 179 on equipment that was leased to their farm corporation. During 2004, […]

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  • How to Transfer Equipment to Multiple Parties

    One of our readers had the following question: “I am slowing down farming. understand can gift 13000 a year in machinery value each to my son, his wife and his son.  What records and paper work do I need for this? Do I need equipment appraised? Does this allow me to take this equipment off […]

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  • Can You Not Report an Expense on Your Tax Return?

    We got a question from a reader today asking if you they are required to report a deduction on their income tax return.  I would normally post a copy of the question here, but the details associated with this question makes that impractical. In brief, the farmer originally reported $2,000 of interest expense as interest […]

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  • Feed Your Harvest Crew and Deduct the Meals

    We got this question from one of our readers and it would apply to almost any farmer who hires a harvest or planting crew: “Hi Paul, I was wondering how taxes work on food bought for workers. On our family farm we have a couple part time hired hands who work 200-300 hours a year […]

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  • Investors Worry About Accuracy of USDA Reports

    In Friday’s Wall Street Journal, there is a front page article in the Money and Investing Section regarding the worry of various investors about how accurate the USDA has been with the latest US corn crop.  As most farmers know there has been whipsaws in the reports issued this year. In June, the USDA reported that stockpiles […]

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