Farm Operations
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IRS Adds New Form For Health Insurance Credit
The IRS has released final guidance for claiming the new health insurance premium credit on your tax return for 2010, along with new Form 8941 (Credit for Small Employer Health Insurance Premiums) and related instructions. Remember that if you employ 10 or less farm employees and their average pay is less than $25,000, you can get […]
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Does a Machine Shop Qualify for Section 179?
We had a reader just send in the following question: “We have built a machine shed with part of it closed in as a farm shop. This part will receive concrete, electric, heat, etc. I have been told this qualifies under the section 179 deduction. Is that correct? “ This is an area of the […]
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Optimize Your Section 179 Deduction!
Farmers with larger profitable operations have an unique opportunity this year and next year to have substantial tax savings. The Small Business Jobs Act passed earlier this fall increased the Section 179 deduction from $250,000 to $500,000 for this year and 2011. As most farmers know, Section 179 allows you to deduct up equipment purchases […]
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Don’t Let AMT Bite You
Now that it is the first day of December, we must make sure that our year-end tax planning is in full gear. Over the next few weeks, I will post various items related to year-end tax planning that you need to review and deal with now. First, many farmers assume that the alternative minimum tax […]
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How Will You Transfer the Farm?!
I ran across another thought provoking article in Cornhusker Economics. In the article, they performed an analysis of farmers in Nebraska based upon their ages. In 1982, 13,436 farmers in Nebraska were under age 35. In the most recent census in 2007, this number had dropped to 3,353 or a 75 percent decrease. The number […]
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Betterment – Why Does That Cost Me Money?
We had a reader ask the following questions: “We had a combine fire this fall, and my question is concerning “betterment” deducted from the claim. The combine was a 2010 model, with only 400 hours on it. The damage exceeded $41,000, and the insurance company deducted $4,100 (10%) for “betterment”. I assume that I can deduct […]
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What’s Your ACRE Payment?
I got a call from one of my clients yesterday saying that he got a surprise in the bank account. His ACRE payment had shown up and it was a substantial amount. We wrote many posts on this about a year ago before the final sign up for the 2009 crop indicating that ACRE might […]
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How Might a Rise In Interest Rates Affect Farmland Prices?
With a lot of recent discussion and articles on whether farmland prices are entering a “bubble” phase, I thought some analysis to see how a potential rise in interest rates might effect farmland prices would look like. Farmland prices (as are most financial assets) is normally a function of the income generated by the farmland […]
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When a Deposit Costs You Money?
One of our readers sent us the following question: “If I prepay inputs for 2011, do I have to deduct them in 2010? Also, if I just need some of the expense this year can I deduct part of it? Thank you!” A farmer that uses the cash method of accounting (which is substantially all […]
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How to Handle Allocation of Purchase Price
One of our readers wrote in the following question: “Our son is in the process of taking over our hog operation. They would like to buy all the buildings, equipment, and house on a contract. Do we need an appraisal for this transaction? Some of the buildings and equipment are 16 years old and fully […]