IRS Removes Farm Income Averaging Guidance on QBI
We did a blog post back on April 23, 2019 regarding a need for clarity on qualified business income (QBI) and farm income averaging. The original one sentence guidance posted to their website indicated that a farmer could only report farm QBI based upon the amount of income elected for farm income averaging.
In our post, we indicated that this made no sense since farm income averaging is simply a method of calculating income tax and in many cases a farmer would want to elect no farm income (since prior years income is higher would be one example).
We have gotten new guidance that this original guidance was incorrect and has been removed from the IRS website. Corrected information should be posted this week. Once we get that information, we will provide a post on it.
Now if we can only get the proposed regulations on Section 199A and cooperatives.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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