Farm Leadership
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Average is Important for 2013 Tax Filing
We had a reader ask the following question: “I would like to here more about income averaging over years and when should someone think of it or not?” Farmers enjoy a unique method of computing their income tax liability versus other taxpayers. Due to the possible wild swings in farm income, the Tax Code allows farmers […]
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Section 179 Update (or Not)
We had a reader ask the following: “I haven’t been able to see if there is any development in increasing the limit for Sec 179 lately for 2014. I am holding out on any equipment purchases until I see an increase in the limit. I would appreciate it if you keep us informed on any […]
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It Maybe Too Good to be True
The Wall Street Journal ran an article on Saturday regarding the Larry E. Austin et al tax court case that was decided in December, 2013 (you will need a subscription to the online version to read the article). This tax court case involved two families who owned a very successful distressed debt investment company. In […]
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Small Slip Creates Large Penalties!
David Enquist from our Moses Lake, Washington office attended a fruit industry seminar yesterday and even though this is specific to Washington State, the potential penalties can apply in many other states. Here is his report on the meeting: I attended the 2014 Fruit Industry Seminar sponsored by the NSAC on Thursday and thought I’d pass […]
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Grain Gifts – How Are They Taxed?
We had an advisor send us the following question today: “We have a farm client who is a cash basis tax payer. He is considering making a gift of grain to charity in 2014. In your opinion, would it be necessary for him to make that gift out of grain harvested in 2013 or could […]
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Co-Ops and Member Equity Risks
We recently came across an article in a USDA magazine called Rural Cooperatives that discusses the increased risk factors cooperatives have faced including class action lawsuits by members alleging improper management of capital credits. The article can be found here. The article lists a number of reasons for different lawsuits including failing to retire member equity […]
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ACA Makes Health Insurance Taxable – Or Does It?
The Affordable Care Act (ACA) contains various provisions that affect farmers, even those with less than 50 employees. One of the primary provisions concerns the payment of health insurance premiums for employees who are not covered by a group plan. In the past, the payment of these premiums was usually deductible for the farmer/employer and […]
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How Low is Too Low For A Rental Arrangement?
We had a reader ask the following question: “Does leasing cropland to a family member for substantially less than fair market value become “gifting” subject to taxes for value above gifting limit?” The answer, like many tax questions, is “it depends”. The rental of real estate or other properties between related parties is always open […]
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Properly Safeguard Your Private Information
Just a quick reminder to always safeguard your private information. Identity thieves love tax season and tax related identity theft cases is a growing problem. The IRS recently reported identity theft affected 1.2 million taxpayers in the calendar year 2012 and an additional 1.6 million were affected through June 29, 2013, an increase of approximately […]
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Decant a Trust – Not Wine
The Wall Street Journal had an interesting story regarding the decanting of a trust when it is appropriate. When a farmer sets up an irrevocable trust and funds it, it is normally extremely difficult to change the structure of the trust, even by the farmer. This usually involves a costly trip to the courts to […]