Farm Taxes
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Issuing a Fraudulent Form 1099 Can Cost You Money
When a farmer makes certain payments to service providers and other vendors, they are normally required to issue a Form 1099 if the total amounts paid exceeds $600 in a year. Normally, this is a very straight-forward process, however, if the farmer willfully files a fraudulent form 1099, the penalty for this can be very […]
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Pay Your Kids; It Saves Taxes!
We had a reader ask the following questions: “Have a good understanding of payroll taxes on payroll paid to a child under 18 working in the operation. The laws are not very concise in my situation. Currently my parents and myself are 1/3 owners of a LLC taxed as a partnership. I am divorced with […]
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Another Cattle Tax Shelter Bites the Dust
We have previously done some posts on certain cattle or horse hobby loss cases. The Tax Court released the Gardner case on Monday July 28, 2014. In this case, Mr. Gardner operated a very successful insurance business in North Carolina. In 2001, he met John and David Pearl, who operated several businesses related to cattle […]
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How to Handle Gift of Grain
We got this question from one of our readers: “My grandfather gave me a generous gift of soybeans for my college fund. Since he gave me the actual crop, he paid no taxes on it. When I sold it I received a check of around $8,000. I will have file a tax return for the […]
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ACA Subsidies: One Court Strikes Down, Another Upholds
The U.S. Court of Appeals for the D.C. Circuit ruled Tuesday morning that the insurance subsidies granted through the federally run health exchange, which covered 36 states for the first open enrollment period, are not allowed by the law. Subsidies provided by state ran exchanges would still be allowed. The highly anticipated opinion in the […]
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Section 179 and Bonus Depreciation Update
I seem to get more emails, phone calls and conversations regarding Section 179 and bonus depreciation compared to any other question. Both the Senate and House have either discussed or proposed several bills to extend bonus depreciation and Section 179 or make them permanent. In my opinion none of these bills will ultimately be passed […]
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Watch Out for Spousal Inherited IRAs
Spouses who inherited IRAs have a couple of elections available to them that non-spouses do not have. However, care must be taken to make sure that the 10% early withdrawal penalty does not apply when distributions are finally taken. When a spouse passes away owning an IRA whose beneficiary is the surviving spouse, that spouse […]
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IRS Modifies Offshore Voluntary Disclosure Program (OVDP)
On June 18, 2014, the IRS announced new updated procedures for the voluntary disclosure program and new streamline filing procedures which in many cases substantially reduces the penalty exposure for non compliant taxpayers to 5% of the highest balance in foreign accounts and non-declared assets. I have personally worked with clients that were involved in […]
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The Continued Attack on Section 1031 exchanges
In the FY2015 budget proposal released by President Obama back in March of this year was certain provisions of importance to farmers. One provision is the permanent extension of Section 179 at the $500,000 level. This would be a welcome change, however, as previously discussed in several posts, this will not happen until after the […]
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IRS Releases Final Regulations on ACA Small-Business Tax Credit
The IRS released on June 20 their final regulations on the small-business tax credit for paying health insurance premiums for the business employees. This credit has been available since 2010 and was at a 35% maximum level until 2013. In 2014 and 2015 the credit increases to 50% for health insurance premium payments offered through […]