Agribusiness BlogFarm CPA Today

September, 2011

  • Program to Sniff Out Gift Tax Cheats!

    It appears that the IRS is initiating a program to sniff out gift tax cheaters who are not properly filing their gift tax returns. The IRS estimates that between 60% and 90% of taxpayers who transfer real estate for little or no consideration to family members fail to file form 709 to report the gift. […]

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  • How Would You Like 16,958 Landlords?!

    While perusing the Admission Document (similar to our initial public offering document and yes; CPAs do like to read these documents for fun) for Continental Farmers Group, PLC, I noticed that the company farms about 52,000 acres (20,840 hectares) in Western Ukraine.  These 52,000 acres are covered by almost 17,000 individual leases (about 3 acres per […]

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  • What’s My Gift Limit?

    We had a reader ask the following question: “Can i give a lot of shares in a family farm corporation to my kids gift tax exempt. Is this just a one time thing.” The subject of gifts can be misunderstood for many farmers.  In general, you can give up to $13,000 (the annual exclusion amount) to […]

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  • If You Reconvert – You Lose Your Spread to 2011 and 2012

    We had a reader ask this question as a follow-up to our previous post on ROTH IRA recharacterizations: “My wife and I converted our traditional IRAs to ROTHs in November of 2010. Since the market has gone down we are considering the recharacterization back to Traditional. You mentioned we would have needed to file for […]

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  • You May Want to Unwind Your Roth Conversion

    Many farmers elected in 2010 to convert their regular IRA to a Roth and either pay the tax in 2010 or spread it out over 2011 and 2012.   As long as the farmer timely filed their income tax return or got an extension to October 15, 2011, they have until that date to “unwind” the conversion […]

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  • Cattle Prices Are Posting New Highs

    Cattle prices are now at record highs of around $1.36 per pound primarily due to herd liquidation caused by the drought in the American Southwest.  Bloomberg has a good article on the reasons for the rally in cattle prices and it is anticipated that high prices will continue for some time. Unlike hogs or chickens […]

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  • What if I Don’t Reinvest?!

    Our reader from yesterday’s post followed up with this question: “Follow- up on condemned highway tax problem. What happens when the proceeds are not reinvested in like find property?” When you receive proceeds from a condemnation of your farm land, you have three years to reinvest the proceeds to defer the capital gains on the […]

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  • Three Years to Reinvest Condemned Farm Land!

    We had a reader ask the following question: “I have new state highway coming through one end of one farm. How is the money received taxed ? Do I have any options for reinvestment without paying tax.” Whenever, farmland is condemned (or threatened to be condemned) for a new road or other use, the tax […]

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  • What is Your Total Capital Gains Tax Rate?

    We have gotten a couple of questions lately about what is the capital gains tax rate on the sale of farm land.  To answer that question requires: How long have you owned the land, Is there equipment and fixtures attached to the land such as grain bins, fencing, etc. that you have taken depreciation on, […]

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  • Goodbye Pesky Logs for Cell Phone Use!

    I am sure that all of our farm readers realized that a log of all of their cell phone usage up to December 31, 2009.  This log was required to deduct the cost of the cell phone service and any personal use would either not be deductible or would have been included as part of […]

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  • Canadian Farmers Vote to Keep Monopoly!

    Canadian wheat and barley farmers have a unique way of marketing their grain.  Unlike the US where each farmer can determine their price each day by calling the elevator, the local ethanol plant and looking it up on the Internet, Canadian farmers belong to the Canadian Wheat Board which is a monopoly for these farmers. […]

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  • Land Is Not Deductible!

    We had a reader ask the following question: “Can I or my s-corp deduct the purchase of farmland as a business expense?” The general answer to this question is no; you cannot deduct the cost of farmland as a business expense.  However, you must review your purchase to determine if, in fact, you only purchased […]

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  • Watch For A State Capital Gains Deduction for Sale of Farm Assets

    We had a reader ask the following question: “Does Iowa have a reduced capital gains tax rate on sale of farm land held for 15 years?” If certain qualifications are met such as holding the farmland or assets for at least 10 years and material participation in the farm (can not cash rent the land), Iowa […]

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  • Less Than Four Months to Get New Farm Buildings Finished

    Farmers who are in the process of constructing new farm buildings or are thinking about it now have less than four months to go if they want to take advantage of 100% bonus depreciation and deduct all of the cost on their 2011 tax return. Remember, there is no loss limitations on this deduction unlike […]

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