Farm Operations
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When an UPREIT Might Make Sense
Many farmers have seen substantial appreciation in their farmland values over the last decade. Many of these farmers are approaching retirement age and would like to “cash” in on these values and diversify their holdings. They do not have any children to take over the farm and are worried that values in their immediate area […]
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How Step-Up In Basis Works
We received this question from one of our readers yesterday: “With my husband passing away in October 2012, I have sold the cattle & much of the farm equipment. Now wondering how all will fall out as relates to depreciation. Obviously, the sale price was less than when purchased new. Ex: Used 90 Dump Truck […]
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Good News for Blackberry, Raspberry and Papaya Farmers
For farmers who raise certain crops with a longer pre-productive life (over two years) such as apples, oranges, and other similar plants, one of the tax rules under Section 263A require all of the costs associated with planting and growing this crop until it reaches economic production to be capitalized and then depreciated over ten years. […]
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Farmer Filing Due Date Update
As most of our readers know, the IRS has extended the March 1 farmer filing deadline to April 15, 2013 for those farmers who MISS the March 1 deadline. One of the major forms that farmers were waiting for was Form 4565 – Depreciation which was released yesterday. However, there are still several forms that will […]
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Hedging Versus Speculation
We got the following question from a reader today: “I was wondering how to handle the purchase of corn options on your tax return?” The answer is one of those “It depends” type answer. If the farmer is purchasing an option for speculation, i.e. he purchases a corn call option, then he falls under the […]
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The Board is Not What it Used to Be!
Today was the first day of the Top Producer Conference. The first session was very interesting. Dr. Tom Deans, author of Every Family’s Business gave a talk on how many farmers really should be looking at “selling” the farm instead of “gifting” the farm. Too many times, the gift of the farm ends up creating […]
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Top Producer Conference
Yesterday I attended the Tomorrow Top Producer conference in Chicago. The main Top Producer gets started today and runs through Friday. Some of the observations from yesterday are: Younger producers are very worried about the availability of land to farm. With cash rents rapidly increasing and land prices exploding, they worry about their ability to […]
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Section 179 Can Create a Farm Loss (In Certain Cases)
We got the following question from one of our readers: “Is it true you can only deduct Section 179 in the amount of your farm income remaining after other deductions? In other words you can not have a loss because of 179 depreciation? If the Section 179 deduction is more can you carry it over […]
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Don’t Forget The Double Payroll Tax Hit!
Many farmers are aware that the FICA rate for employees (including their employee portion, if self-employed) has gone back to the old 6.2% which is up 2% from the temporary reduced 4.2% rate for 2011 and 2012. This increase applies on wages as paid and will also apply on any self-employment income paid with the […]
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IRS Announces When Returns Can Be Filed
The IRS just released a notice announcing that processing of returns will commence on January 30, 2013 for most individuals. More complex returns will not be accepted by the IRS until late February or even into March, 2013 due to the complex changes to the IRS software system caused by last week’s new tax law. The notice mentioned […]