Farm Leadership
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All Time Low Interest Rates!
The IRS just issued Revenue Ruling 2012-2 which lists the Applicable Federal Rates for January, 2012. These are the minimum interest rates that you must charge on related party loans such as a loan from a parent to a child or a shareholder to their corporation. For short-term loans, this interest rate is only .19%. […]
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Is it 15, 16, 17 or even 18?
One of the hardest things to keep track of as a CPA who prepares income taxes is “What is the due date of your tax return, income tax estimates and other due date?”. Normally these due dates fall on the 15th of a month. However, if the 15th is a Saturday, Sunday or federal holiday, […]
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Estimate Payment – Update
With January 16, 2012 being less than two weeks away, I thought I would update our farmers on their estimated tax requirement and give some examples. As we have previously posted, most farmers work very hard to get their income taxes filed by March 1 of each year since as long as they file their return […]
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Crop Insurances Proceeds – Update
An alert reader let me know that one of my points on how to defer your crop insurance proceeds was not written as well as it could have been. In my original post, I had indicated that each crop is a “separate” business unit, then each crop is looked at separately. This separate business unit […]
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When Do I Report My Crop Insurance Proceeds?
We had a reader ask the following question: “I was flooded on one farm & hailed on another so received multi-peril income this year. How much of our MPCI can be deferred?” Without knowing all the facts here, we can give general advice on how much crop insurance proceeds can be deferred from one year […]
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Payroll Tax Cut Extended For Two Months – Sortof!
President Obama signed late yesterday a new law extending the payroll tax cut for the first two months of 2012. This means for January and February 2012, the employee’s portion of the FICA tax will be 4.2% instead of the normal 6.2%. For self-employed farmers, for net SE farm income up to $18,350 shall be […]
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For Building to Qualify for 100% Bonus Depreciation It Must Be Complete in 2011
We had a reader ask the following question: “I put a deposit on a building in Nov 2011 thinking that it would completed and paid for by 12/31/11. The builder has not started the building yet and says it will most likely be completed mid January. What can i do to get the 100% cost […]
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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, […]