Farm Leadership

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    June 24th, 2016


    FICA Wage Base Likely to be $126,000 in 2017

    The Social Security Administration’s Office of the Chief Actuary has projected, based on two out of three of its methods of forecasting, that the 2017 FICA wage base will increase from $118,500 in 2016 to $126,000 in 2017.  The current wage base subjects employee’s to maximum FICA tax of $7,328.40.  If the new base goes […]

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    June 23rd, 2016


    Help – I Forgot to Take Depreciation

    Many times we will be reviewing a farmer’s tax records and notice that the farmer forgot to take depreciation on an asset they placed in service several years ago.  If they sell the asset, the Tax Code may force them to pretend that they took depreciation on the asset and report gain even though they […]

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    June 22nd, 2016


    Have you Locked in Positive Working Capital Changes

    FarmDoc Daily issued a report on how recent crop price increases have improved working capital for the 2016 crop.  The report went through the working capital changes for Central Illinois Lower Productivity Farmland assuming a 50/50 corn/soybean crop mix.  The working capital changes were shown for owned, cash rent and crop share farmers on a […]

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    June 22nd, 2016


    Will You Be Able To Deduct Interest?

    The House Republicans will release a blueprint on June 24 regarding their plans for a tax code overhaul.   This plan includes the following major changes to the tax code: Reduce the corporate tax rate to 20% (from the current 35% rate). Allow 100% business expensing of capital purchases. Eliminate the interest deduction. This blueprint will […]

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    June 21st, 2016


    Alaska – A Chance for Education and Vacation

    Roger McEowen and myself did a two-day seminar last week in Western North Carolina and this was my first trip to this part of the country.  My wife and I then drove over to Nashville and went through the Smokey Mountains.  This is a very beautiful part of the country.  When we were headed into […]

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    June 20th, 2016


    Long-Term AFR’s Hit All-Time Lows

    The IRS issues the Applicable Federal Rates (AFR) each month.  These rates are broken down into short-term (less than three years), mid-term (between 3 and 9 years) and long-term (more than 9 years).  The IRS just issued the rates for July, 2016 and the long-term rate hit an all-time low of 2.18%.  The old low […]

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    June 16th, 2016


    Can My IRA Own Farmland?

    We continue to get this question fairly often.  A farmer has some excess cash in their IRA or retirement account and would like to purchase farmland since they feel this is a better investment than what they can get from the bank.  Yes, they can do this, BUT, there are many potential drawbacks.  First, they […]

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    June 15th, 2016


    National Collaborative Farming Conference

    Today, I spoke at the National Collaborative Farming Conference held in Nashville, Tennessee.   My talk was on entity planning for collaborative farming, however, my post today is how some of these farming operations have been structured. Our first speaker was a farmer from Australia who originally farmed about 5,000 acres and found that he did not […]

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    June 7th, 2016


    Farm Debt is Growing

    The Kansas City Fed just released a report indicating that farm debt is accumulating at a faster pace.  Farmers with carryover debt increased from 18% of loans to 29% of loans in the first quarter of 2016.  Also, 18% of total loans made in the first quarter involved restructuring existing debt to meet short-term liquidity […]

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    June 3rd, 2016


    LLC Does Not Provide Legal Protection (if you mess up)

    Many farmers have created limited liability companies (LLC) to hold equipment, especially semi tractors and trailers.  The assumption is that by putting these assets into a LLC, the farmer is shielded from any legal liability in case of an accident.  The answer, like most questions I get, is it depends. If the farmer runs the […]

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