December, 2015
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50% Bonus Depreciation Applies to More Property
50% bonus depreciation has been extended to 2020 (40% in 2018 and 30% in 2019). Under the old rules, only property with a life of 20 years or less was eligible for bonus depreciation. Since all farm property has a 20 year or less life, then any new farm property was eligible for bonus depreciation. […]
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Farm and Ranch Provided Housing
Many farmers and ranchers provide housing for their employees. Farmers who participate in H2A temporary labor from other countries have certain requirements to provide this housing. By providing this housing, there are certain tax advantages that may accrue to the farm or ranch. First, if the employee being provided the house is not an owner […]
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Wind Energy Credits Extended and Phased-Out
An income tax credit is allowed for the production of electricity from wind facilities. This credit is equal to 1.5 cents per kilowatt-hours of electricity produced. The producer can also elect to take 30% of the cost of the facility as a credit against their income taxes instead of the production credit (Warren Buffett’s Berkshire […]
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Standard Mileage Rates Drop 3.5 Cents Per Mile
The IRS just released final 2016 standard mileage rates for cars, vans, pickups and panel trucks late last week. The 2015 rate was 57.5 cents per mile and during our tax class in Des Moines last week, David Repp and I were betting how much the 2016 rate would decrease by. I thought it would […]
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Looks Like $500,000 Section 179 is Now Permanent
Although not passed yet, “The Protecting Americans from Tax Hikes Act of 2015” will likely be passed by Congress in the next day or two and then signed by President Obama. One of the key provisions for farmers is to make Section 179 permanent at the $500,000 level. Once equipment purchases total $2 million, then the […]
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Iowa Land Values Drop 3.9% from 2014
Iowa State University has performed a survey of Iowa land values since 1941. Nominal land values peaked in 2013 and for 2015, the values decreased by $310 to an average $7,633 per acre or drop of 3.9%. Iowa is split into 9 zones, 3 along the top part of the state, 3 in the middle […]
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One Year Later
We are hearing from various sources that the tax extender bill will not be done until likely this Saturday which will be December 19. Last year, the bill was signed on December 19, so if Congress passes it on the 19th and heads home, the tax extender bill this year will be even later than […]
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Inflation-Indexed Child Tax Credit Stymies Extender Bill
The tax extenders bill working its way through Congress continues to be stymied by a fight over indexing the child tax credit to inflation. Republicans in both chambers oppose this, but House Minority Leader Nancy Pelosi (D-CA) is driving this position and does not appear to want to back down. Pelosi believes that the Democrats have […]
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Additional De-Minimis Election Update
Yesterday, we posted on how making the $2,500 de-minimis election may not make sense in certain cases, especially if the farmer is purchasing many assets costing less than $2,500 that will appreciate in value (such as young breeding stock). We mentioned in the post that the gain was ordinary, but forgot to mention that this gain […]
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Be Careful with De-minimis Election with Breeding Stock
We mentioned in a previous post that the IRS has updated the de-minimis election to allow farmers and ranchers to deduct all items costing less than $2,500 on their income tax return. This is an annual election and most farmers will make the election. This allows them to deduct all items costing less than $2,500 […]