February, 2013
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Farmers Should Be Able to File Tax Returns by Monday
The IRS announced today that most if not all of the forms waiting to be released should be final and ready for processing by Monday. Some software providers may be ready a few hours earlier, but we are guessing that all should be ready on Monday. If you file on or after Monday, you are not required […]
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How Step-Up In Basis Works
We received this question from one of our readers yesterday: “With my husband passing away in October 2012, I have sold the cattle & much of the farm equipment. Now wondering how all will fall out as relates to depreciation. Obviously, the sale price was less than when purchased new. Ex: Used 90 Dump Truck […]
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Must Have W2 Wages to Deduct DPAD
We got this question from a reader today: “Can the amount I contribute to my solo 401k as deferred compensation be used as wages when figuring the domestic production activities deduction? I have no other wages.” Several years ago Congress placed into law a Domestic Production Activities Deduction (DPAD) that was primarily in response to […]
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Safe to File After March 1
Although we posted on this subject already, we have received multiple questions from readers and other CPAs regarding filing after March 1. As of the time of this post, there are most likely at least two major forms that the IRS has not yet released that will directly affect most if not all of our […]
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Good News for Blackberry, Raspberry and Papaya Farmers
For farmers who raise certain crops with a longer pre-productive life (over two years) such as apples, oranges, and other similar plants, one of the tax rules under Section 263A require all of the costs associated with planting and growing this crop until it reaches economic production to be capitalized and then depreciated over ten years. […]
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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 […]