Farm Taxes

  • Don’t Forget the State When it Comes to Estate Taxes

    Currently, for people dying in 2009, you can have a taxable estate of up to $3.5 million and not pay any federal estate taxes.  For 2010, this amount is unlimited, but goes back to $1,000,000 in 2011 and beyond. Congress is working on changing these amounts and my guess is that the current $3.5 million amount […]

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  • Make Sure to Take Capital Gains This Year

    If you combined taxable income including capital gains is in the 15% tax bracket or lower, then all of your long-term capital gains will be tax free in 2009.  This also applies to qualified dividend income.  For example, if you file a joint return with your spouse and have farm income of $50,000, have two […]

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  • Farmers Tax Guide

      I have had several requests from farmers and their advisors regarding an online farmers tax guide.  From what I can tell there is no such thing, but in the near future, there should be one. I am working on a “wiki” based online farmers tax guide.  This guide would be for income, estate, excise […]

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  • A Farm Couple Scores a Victory Over the IRS

    In the US Tax Court decision – Paul D. Garnett and Alicia Garnett v. Commissioner – rendered in June of this year, the court ruled that farmers who hold business interests in limited liability companies (LLC) and limited liability partnerships (LLP) are not passive investors.  This is a great victory for many farmers and entrepreneurs that own […]

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  • Don’t Trade-in Equipment – Sell it Instead

    As a tax advisor, I would normally tell my farm clients to always do a like-kind exchange on their farm equipment.  This would normally result in trading-in an older piece of equipment for a newer one of higher value to defer the tax on the old farm equipment. However, for 2009, there are many cases […]

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  • Defer Your Land Sale into 2010 Today

    My partner Scot and I have a 1031 exchange company that handles many tax-deferred exchanges each year.  About this time of year I like to remind our clients that they may be able to sell their land or real estate for cash, yet defer paying the tax on the sale until 2011. Here is how […]

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  • Farm Landlords – What’s my tax rate

    If you are a farm landlord, you can be subject to several income tax rates and rules.  In general, you will either file your income on Schedule E, Schedule F or Form 4835.  Which onewill depend on whether you materially participate in the farm operation – in other words, the extent to which the landlord is […]

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  • In-Kind Wages Can Be Better Than Cash

    One of the great options open to farmers is to pay their employees in-kind wages.  In-kind wages are the payments of the crops that a farmer grows.  For example, a farmer could pay their employees either cash wages of $10,000 or 1,000 bushels of soybeans worth $10,000.  The reason that a farmer would want to […]

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  • Some Income Tax Goodies

    The American Recovery and Reinvestment Act of 2009 delivered several tax goodies for farmers and their families.  Here are some of the highlights: 1.  Higher Education Credits – You can now have a maximum credit of $2,500 for higher education costs and this applies for the first four years of school instead of the old […]

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  • Thoughts on Estate Planning for Farmers

    I think over the next several months major changes will be made to the estate tax laws.  Right now, each individual can have a tax-free estate of $3.5 million.  Next year it is unlimited, however in 2011, it reverts back to $1.0 million.  I think Congress will make changes this year to make the current […]

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