Farm Industry Trends
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2013 Social Security Changes
The Social Security Administration just announced the 2013 changes for items related to inflation adjustments. The Cost-of-Living Adjustment for 2013 will be 1.7%. This means that social security recipients will receive a 1.7% raise beginning in January. The wage base that is subject to FICA taxes will increase from $110,100 to $113,700. Therefore, the maximum amount […]
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Another Tax Season Bites The Dust
For most farmers, their tax season usually ends on March 1 of each tax year since that is when they usually file their income tax returns. However, for the rest of us, our normal due date is April 15, but many of our clients get an extension until October 15. These clients are usually our […]
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Where Will Harvest Price End Up For Crop Insurance?
The USDA report that came out this morning appeared to have a bullish bias to it. Corn and Beans were up at least 20 cents and wheat was not too far behind. As of today prices, it appears the average corn price for the month of October for the harvest crop pricing is about $7.50 […]
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Is the True US Deficit $76 Trillion Instead of $16 Trillion
Bill Gross is the lead investment manager for PIMCO which is probably the largest Bond Fund company is the US or the world. Every month, he writes an Investment Outlook letter to their investors and this month’s letter was entitled “Damages“. In the letter, he recaps the countries whose deficit is large as a percentage […]
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Will Farmers Have More “Repairs” This Year?
Until about two years ago, farmers could have been in a battle with the IRS concerning whether a repair was really a repair or an asset that needed to be depreciated. Beginning in late 2010 and through 2011, 100% bonus depreciation applied for any new purchase including what might have been classified as a repair […]
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Maintain Flexibility with Deferred Payment Contracts
One of the best tools in our farm tax toolbox is the ability to use deferred payment contracts to achieve our desired level of taxable farm income. These contracts call for the sale of grain in 2012, with payment being received in 2013. Normally, the sale of the grain is taxed when cash is received, however, […]
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Does The Fiscal Cliff Really Make Drastic Cuts in Spending?
It seems every time I turn the TV to a national news channel that someone is always talking about how drastic the spending cuts will be if the Fiscal Cliff goes into effect on January 1, 2013. I have always wondered what that reduction in spending would be and I ran across a study from […]
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Crop Revenue Would Need To Drop 21.4% to Equal 1980 Income Shock
The Kansas City Federal Reserve just issued a paper on the Nebraska economy and I found a couple of the pages in the paper interesting. First, to equal a 1980s income shock, current farm revenue would need to drop by 21.4% and the value of total farm production would need to decrease by 15.7%. Now 21.7% […]
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IRS Extends Drought Replacement Period for Ranchers
The IRS announced today in Release 2012-72 that they have extended the period for replacing livestock sold due to drought for another year. Normally, if a rancher is forced to sell their breeding, draft or dairy livestock due to drought, any extra sales caused by drought is allowed to be deferred for up to four years. This […]
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2012 Interest Rates for Special Use Valuation
The IRS today posted Revenue Ruling 2012-26 which lists the applicable interest rates (go to page 3 of release for the actual ruling) available if an estate elects Special Use Valuation in valuing farmland. Special Use Valuation allows an estate comprised primarily of farmland (or other qualified business property) to elect to value the farmland […]