August, 2018
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Assistance to Farmers Finally Announced
The USDA finally announced their program to help farmers. It was originally touted as a $12 billion program, but the initial payment is likely to be less than $5 billion and most producers won’t see any money until after the election.
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IRS Denies State Workaround on State and Local Taxes
As expected the IRS issued proposed regulations last week that reduced or eliminated the benefit of any contribution designed to expand the personal tax deduction beyond the current $10,000 limit.
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Landlords – Which is Better, Cash Rent, Crop Share or Custom Farming?
Cash rent farm landlords that do not farm may not benefit from the new Section 199A deduction due to the proposed regulations. There may be other options to consider if the deduction is important.
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When Not to Aggregate?
I reader shows an example where not aggregating works better for Section 199A. However, it is likely not too applicable to most farm operations.
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Aggregate, Aggregate, Aggregate!
The aggregation option is a great tool allowed by the proposed Section 199A regulations. We go over a couple of examples.
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What is Common Ownership?
Common ownership is needed to allow the Section 199A deduction for cash rented ground or to aggregate entities if over the threshold. We explain how.
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Several Possibilities for Education on the New Tax Law
Chris Hesse and myself will be doing a full day training on the new tax law and how it affects farmers over the next several weeks. A couple of sessions will be available via webinars and we also will be doing seminars for various firms during this time period.
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What I Need to Attach to Schedule k-1
Even more information will be required on passthrough income tax returns due to Section 199A.
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What Wages Qualify?
For higher income farmers W2 wages paid can be very important. We explain why and how to calculate these wages.
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Are You Dealing?
Most farmers and grain warehouse owners assume all of their income will qualify for the new Section 199A deduction. It appears that based on the just released IRS proposed regulations that this may not be correct. We explain why.