Farm Industry Trends
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ObamaCare Survives The Supreme Court!
The Supreme Court just issued their ruling stating that ObamaCare is partly constitutional and partly non-constitutional, but the constitutional right of Congress to levy taxes trumps the Commerce Clause. This was an extremely tight 5-4 ruling with Chief Justice Roberts siding with the 4 more liberal justices. For now, the most immediate effect facing farmers […]
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Take Advantage of State Programs
Our blog tends to focus on the federal issues regarding income taxes. Sometimes we forget that state sales, income and other taxes may end up costing the farmer more than federal income taxes. For example, in Washington state, we do not have an income tax, but we do have sales, property and a business and occupation […]
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1 AGI instead of 3 AGI
For farmers who are enrolled in ag programs with the FSA, there are currently three different levels of AGI (adjusted gross income) that affect whether they qualify to receive any payments from the FSA during the year. These levels are: $500,000 of non-farm income $750,000 of farm income $1,000,000 of non-farm income, but OK if […]
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Medicare Surtax Is Coming on January 1, 2013
Beginning January 1, 2013, there is a new Medicare Surtax on wages and self-employment income in excess of $200,000/$250,000 (married couples). This surtax is comprised of a .9% rate which added to the current total Medicare tax rate of 2.9% equals a new combined rate of 3.8% Additionally, if you have certain types of investment […]
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Nothing Better!
Yesterday I spent the afternoon traveling from Minneapolis to Sioux Falls. There is nothing better (maybe driving/running/operating a combine in the fall is better) than driving this great country looking at crops. The crops look good from the road terse here has been some weather stress. Several areas in Minnesota showed hail and excessive rain damage […]
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With Low Interest Rates, Special Use Valuation May Not Save Much Estate Tax
With the explosive increase in cash rents and the continued decrease of interest rates, the savings by electing special use valuation for estate tax purposes may not be available in 2012. One of the special estate tax provisions for farmers is the option to elect to reduce the value of the estate to reflect the […]
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Watch Out For State Taxes!
In my home state of Washington, we have an excise tax for any real estate sales that take place during the year. This tax is usually close to a 2% rate on the gross sales price. For a sale of $1 million of real estate, your excise tax liability is about $20,000. Many taxpayers had created […]
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Food for Thought on Ag Yields
We had a reader respond to our last post on US rarely being #1 in yields that I thought I would share with you: “Really interesting post. Something that jumped out at me was the need to keep in mind the spatial context of these numbers. Lets take Chile and Jordan corn production for example. […]
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US is Rarely #1 in Yields
I think it is fairly common for us as Americans to assume that our agricultural production leads the world in yields. But when you review the average yields by variety, in many cases, the US does not even make the top 5 for yield. Part of this may be due to smaller countries using irrigation […]
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Present is Better Than Future!
Many farmers have created limited partnerships or limited liability companies (LLC) to hold their farmland. As part of this process, gifts are made to children and grandchildren for estate planning purposes. For 2012, each person can give $13,000 (most likely rising to $14,000 in 2013) to as many people as they want and not have this gift counted […]