Farm Taxes
-
A Farm Couple Scores a Victory Over the IRS
In the US Tax Court decision – Paul D. Garnett and Alicia Garnett v. Commissioner – rendered in June of this year, the court ruled that farmers who hold business interests in limited liability companies (LLC) and limited liability partnerships (LLP) are not passive investors. This is a great victory for many farmers and entrepreneurs that own […]
-
Don’t Trade-in Equipment – Sell it Instead
As a tax advisor, I would normally tell my farm clients to always do a like-kind exchange on their farm equipment. This would normally result in trading-in an older piece of equipment for a newer one of higher value to defer the tax on the old farm equipment. However, for 2009, there are many cases […]
-
Defer Your Land Sale into 2010 Today
My partner Scot and I have a 1031 exchange company that handles many tax-deferred exchanges each year. About this time of year I like to remind our clients that they may be able to sell their land or real estate for cash, yet defer paying the tax on the sale until 2011. Here is how […]
-
Farm Landlords – What’s my tax rate
If you are a farm landlord, you can be subject to several income tax rates and rules. In general, you will either file your income on Schedule E, Schedule F or Form 4835. Which onewill depend on whether you materially participate in the farm operation – in other words, the extent to which the landlord is […]
-
In-Kind Wages Can Be Better Than Cash
One of the great options open to farmers is to pay their employees in-kind wages. In-kind wages are the payments of the crops that a farmer grows. For example, a farmer could pay their employees either cash wages of $10,000 or 1,000 bushels of soybeans worth $10,000. The reason that a farmer would want to […]
-
Some Income Tax Goodies
The American Recovery and Reinvestment Act of 2009 delivered several tax goodies for farmers and their families. Here are some of the highlights: 1. Higher Education Credits – You can now have a maximum credit of $2,500 for higher education costs and this applies for the first four years of school instead of the old […]
-
Thoughts on Estate Planning for Farmers
I think over the next several months major changes will be made to the estate tax laws. Right now, each individual can have a tax-free estate of $3.5 million. Next year it is unlimited, however in 2011, it reverts back to $1.0 million. I think Congress will make changes this year to make the current […]
-
Estate Tax Law Changes are Coming
I have been reading several articles lately on the possible estate tax law changes that will be coming. The Bush changes from about 8 years ago will be changed and soon. Most agree that the estate exemption will most likely be around $3.5 to $5 million and indexed for inflation. Also, the gift tax exemption […]
-
Life Insurance Company Stock Sales May Be Tax Free
The US Court of Federal Claims issued a decision in 2008 indicating proceeds from selling life insurance stock companies that had de-mutualized were in fact tax free. There have been serveral large life insurance companies such as Metropolitan, Principal, Prudential, etc. that have de-mutualized over the last several years. The IRS had argued that when these […]
-
Uncle Sam Helps with Home Purchase
For those who have not owned a personal residence in the last three years, Uncle Sam is wanting to help you buy a new home. If you purchase a home this year and your income is below certain levels, then Uncle Sam will refund you $8,000 when you file your income tax return. You can […]