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Irrigated Cropland Values Up Sharply Due to Drought
The Kansas City Federal Reserve issued their latest Agricultural Credit Conditions report for the 4th quarter of 2012. Due to the widespread drought in their area, irrigated cropland values saw a 13 percent jump in the 4th quarter alone and up 30% for the year. Cash rental rates for irrigated cropland also surged more than […]
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1031 Tax-Deferred Exchange Does Not Always Defer All Taxes!
With farmland prices at or near an all-time high, many farmers are considering selling their farmland and rolling over the gain into other real estate on a tax-deferred basis using a Section 1031 tax-deferred exchange. Under these rules, the farmer has 45 days from the date of closing (not when you sign the offer) to […]
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Is a Dynasty Trust Right For You?
A common question that arises in our meetings with clients is about making sure that the farm remains in the family for multiple generations. One option for accomplishing this is the use of a Dynasty Trust. Many states such as South Dakota, Delaware and Alaska allow for trusts that are either perpetual or last for […]
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Another Bill to Reduce Farm Payments is Introduced!
Four Senators (two Democrats and two Republicans) this week introduced a bill “The Farm Program Integrity Act of 2013” to place a cap on farm payments that an individual farmer can receive and try to close “certain perceived” loopholes in the farm payment program. This bill closely follows language that was included in the original […]
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Don’t Forget the “Magic Blurb” on Donation Acknowledgements!
We came across this blog from the Internet and it is a great reminder for all of us that will be getting charity donation acknowledgements between now and when we file your tax return. In order to claim a charity donation, you must get a written acknowledgement from the charity and retain in your files […]
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Late Tax Filing and Wrong Form 1099!
Not only will most farmers have to file after March 1, 2013 due to a delay in tax forms by the IRS, we now have an announcement that almost all form 1099s issued by the USDA for Natural Resources Conservation Services payments in 2012 are either wrong or were never issued. The expected mailing date […]
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Yes! You Can Write Off That New Machine Shop (At Least 50%)
We got the following question from a reader: “I built a new farm workshop in 2012, can i take 1/2 of the cost off and depreciate the rest over time? I read something regarding bonus depreciation on workshops and was wondering if this qualifies?” Bonus depreciation was placed into the tax laws as a result […]
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Farmer Filing Due Date Update
As most of our readers know, the IRS has extended the March 1 farmer filing deadline to April 15, 2013 for those farmers who MISS the March 1 deadline. One of the major forms that farmers were waiting for was Form 4565 – Depreciation which was released yesterday. However, there are still several forms that will […]
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Crop Insurance Proceeds on Feed Consumed by Livestock
We received the following question(s) from a reader: “My husband and I received crop insurance proceeds this year due to drought. It was for hay and pasture losses. The insurance company classifies the crop as “forage”. If this was hay we would normally feed to our cows in the following year may we defer this […]
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Capital Gains Tax On Inherited Property
We got this question from one of our readers: “My wife received about 160 acres when her mother passed away 3 years ago in a trust, which came from her grandfather who left it to her mom in trust. We were told that we will have to pay capital gains tax on what the value of […]
