Farm Leadership
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If It Sounds To Good To Be True – It Usually Is!
Two recent Tax Court cases reinforce the old saying of “If it sounds to good to be true – It usually is”. In the cases, two relatively wealthy taxpayers consulted with a CPA at a Big 6 CPA firm and entered into transactions to convert a regular IRA with assets in excess of $1 million […]
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Gift of Farm Commodities
We had a reader ask the following question as a follow up to our post of gifts: “Please touch on one more aspect of gifting. Gifting grain and the tax owed by the recipient. Thanks, I enjoy your emails.” Cash method farmers have had many situations where the gifts of farm commodities to family members […]
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How Would You Like 16,958 Landlords?!
While perusing the Admission Document (similar to our initial public offering document and yes; CPAs do like to read these documents for fun) for Continental Farmers Group, PLC, I noticed that the company farms about 52,000 acres (20,840 hectares) in Western Ukraine. These 52,000 acres are covered by almost 17,000 individual leases (about 3 acres per […]
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What’s My Gift Limit?
We had a reader ask the following question: “Can i give a lot of shares in a family farm corporation to my kids gift tax exempt. Is this just a one time thing.” The subject of gifts can be misunderstood for many farmers. In general, you can give up to $13,000 (the annual exclusion amount) to […]
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You May Want to Unwind Your Roth Conversion
Many farmers elected in 2010 to convert their regular IRA to a Roth and either pay the tax in 2010 or spread it out over 2011 and 2012. As long as the farmer timely filed their income tax return or got an extension to October 15, 2011, they have until that date to “unwind” the conversion […]
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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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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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Hillside Combining Part 2
We had a reader in Washington state suggest that we try to explain how steep some of these hills are that we harvest in this area. Unless you have been on a combine harvesting a steep hill, it is hard to explain just how steep these hills are. I know that as a child with […]
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Will the IRS want your Accounting Software File?!!!
In a recent Florida Federal District Court Case, the IRS was granted the right to summon the accounting software file of a small business. This case did not involve a farm, however, the IRS has gotten very aggressive in demanding the actual accounting software file, especially Quickbooks and other common software accounting programs. Before the […]
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Changes to Minnesota Estate Tax Law
With the final completion of the Minnesota shutdown being resolved last month, some nice although somewhat complex changes to the estate tax law were made to help farmers. The federal tax law has a provision for farmers called special use valuation that allows a reduction in farmland value of up to about $1 million on an estate tax return. The […]