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IRS Releases Draft Form For New Net Investment Income Tax
The IRS has finally released a draft of the new form 8960 to report the 3.8% net investment income tax for income in excess of the threshold amounts. As previously discussed in several posts, the 3.8% tax applies to the lesser of (1) your net investment income including cash rents or the amount in excess […]
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Is Peak Corn Over (For Now)?
A few years ago, the term Peak Oil was in the media. This term represented the notion that the production of oil worldwide had peaked and we would be showing lower and lower production levels each year. With the discovery of fracking of shale oil formations, this term is not used much lately. My question […]
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Hedge Accounting Update
The last presentation at FFSC was done by Todd Doehring of Centrec and myself on the proposed guidelines for hedge accounting. For tax purposes, a valid hedge is usually accounted for on a strictly realized basis, i.e., the futures or options on futures is not recognized in income until the hedge is closed out. For […]
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Evaluating the New Century Go-Go Farmer
Bob Craven, head of the Center of Farm Financial Management (FINPACK) for the University of Minnesota gave a discussion on evaluating the new century Go-Go farmer. The Median income for 2012 for Minnesota farmers was a slightly less than $200 thousand, while the top 20% were almost $700 thousand of net income. Top 20% characteristics: […]
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The Perils of Benchmarking
The next two sessions at FFSC dealt with the perils of benchmarking. As farmers try to benchmark themselves against other comparable farm operations, it becomes readily apparent that many perils or issues can arise. In many cases farmers (since they are human) really like using benchmarking when they are above average. In they are below […]
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Farm Financial Standards Council – Part 1
The annual conference for the FFSC got started this morning with a presentation by Dr. Tom Gillaspy a retired Minnesota State Demographer. He led off the presentation by stating that demographers are even more boring than accountants. I was almost insulted by this comment until I decided to consider it a compliment since he was fairly exciting. […]
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The Bucking Combine
Friday and Saturday of last week I spent driving (or operating) my cousin’s Case IH 2388. I got started around 1 pm on Friday. For that day, we had two machines running, an older 1470 and the newer 2388. We were cutting on a field with slopes ranging from about 10 degrees to several in […]
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Help Prevent SE tax on CRP Rents!
On June 19, we reported to you that CRP income may be subject to SE tax. The Tax Court ruled in the Morehouse case that CRP income (which the USDA calls “rent”) is subject to self-employment tax, even though the land owner has less involvement in the real estate activity than most commercial landlords. The Tax […]
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How Steep Is It!
This post is a continuation of my post from yesterday. The farm that I grew up on had hills with a fairly aggressive slope to them. The old 1960 era Hillside combines could level the combine on up to a 44 degree slope. There were two primary reasons to level the combine. First, it prevented […]
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Proof That I was a Farm Boy
My sister is in the process of converting a bunch of my dad’s old slides and I thought I would post some of the photos of me as a farm boy and growing up on the farm. Due to size, I will probably post these over the next few days. You can click on the […]
