Profit Center
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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 […]
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Why Strategic Plans Fail
I found a great article written by Ron Price, CEO of Price Associates, in AgProfessionals.com regarding why strategic plans fail. At one time, I was in a manufacturing company that periodically performed a strategic plan that had many of the problems brought out in this article. In short, there are six primary reasons why strategic […]
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The Budget is Your Road Map
Most farmers prepare a budget at the end of the year to present to their bankers and then promptly put it away and forget about it until the following fall. I like to envision a budget is similar to a road map. A map has many ways to get from point A to point B. […]
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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 […]
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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 […]
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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 […]
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Bonus depreciation extended to 2009
The recent Stimulus Tax Package includes an extension of bonus depreication from 2008 into all of 2009. This means that for all new equipment (including single purpose ag buildings) qualifies for 50% of the cost being deducted in 2009 with remainder being depreciated over the normal tax life of the equipment. For example, if a […]
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A freebie from the IRS
There was a new law passed last year that allows all taxpayers that use the standard deduction to take an extra deduction of up to $1,000 for real estate taxes paid on a personal residence. This deduction is in addition to the standard deduction. This deduction applies to farmers who do not itemize their deductions. […]
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The Old Way to Make Money – Earn It!
I saw a great post by Chuck Schwartau from the University of Minnesota Extension deparment. The post was related to the dairy industry, but is applies to all farming and any business. For the last twenty years or so, it seems that most people thought they could make easy money by borrowing more than they […]
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Farm Lending–Which Type Are You?
David Kohl, ag lending consulting, divides target farmers and ranchers for future agricultural lending into four categories and percentages: 10 percent approaching $600,000 in annual revenues and planning to grow this toward $1.5 million in revenue 30 percent that will be scaling down to a rural “lifestylers” or those commonly living on five to twenty […]