Farm Taxes
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How Much Will Farmers Pay to Iowa For Low Section 179
We posted last week on Iowa not coupling with the federal government on the permanent increased Section 179 that was included in the tax bill passed in December, 2015. It appears fairly certain that the Iowa Senate will not allow a vote on coupling Section 179 for 2015. We decided to try to get an […]
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IRS Interest Rates Get Even Lower
The Federal Reserve Bank increased interest rates back in December and almost everyone thought interest rates would start to rise. The IRS issues applicable federal rates (AFR) each month that indicates the minimum amount of interest that should be charged on loans and other related transactions. For February, the long-term rate (loans longer than 9 years) […]
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Why Won’t Iowa Couple Section 179?!
Since 2010, Section 179 has been at the $500,000 level for federal income tax purposes. Most states have also allowed Section 179 to be at this same level. However, there are several states such as California that continue to have a much lower allowed Section 179 deduction. As we have discussed in many previous posts, […]
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Top 10 Tax Tips for Farmers (Maybe Not)
Accounting Today is a magazine for CPAs. On their website, they just posted their Top 10 tax tip for farmers. There are some tips here, however, I think the photos are better than the tips. Most of them are fairly simple, but you may pick up something that you did not already know. Our blog […]
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Can You Defer ARC/PLC Payments?
I continue to get questions regarding whether you are allowed to defer 2014 ARC / PLC payments received in 2015 to 2016. The confusion relates to the misconception that these payments qualify as crop insurance proceeds. These payments are agricultural program payments. Crop insurance proceeds related to yield losses are allowed to be deferred one […]
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We Knew It Was Coming!
The passage of Obama Care created the 3.8% net investment income tax on all unearned income such as interest, dividends, rents, passive income, etc. This extra tax only applies if your income is over a certain threshold ($200,000 single and $250,000 for married couples). This tax does not apply to earned income of partnerships and […]
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Pre-1977 Purchases May Get 100% Step-up or Not!
We had a reader respond to our last post with the following: “One additional thought on the “Farmer Brown purchased 40 years ago” example. If it was a pre-1977 joint interest, his wife could get a 100% basis step up, if the funds to purchase the property and pay for the mortgage came solely from […]
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What Gets a Step-Up
I continue to get questions regarding how much of a step-up in cost basis farmland gets when someone passes away. Again, as with most tax questions, it depends. The key factor for determining the step-up is who owns the land. Is it owned by the person who passed away or is it owned by an […]
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Many Specialty Crops See Drop In Prices Too
It is not just corn, soybeans and wheat that are seeing slumps in prices. Many specialty crops such as almonds are also seeing a drop in price due to an increase in the dollar and reduced demand for the product. A recent article by Valley Public Radio spotlight the issues that almond growers are facing […]
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Planted Vines and Trees Qualify for Bonus Depreciation
It is not often that we post on orchards or vineyards, but one of the new provisions from the tax extenders bill is the ability for orchards and vineyards to deduct 50% of the cost of trees or vines in they year of planting instead of the year the plant is placed into service. The […]