Farm Leadership
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John Deere Expects Increase (Hopes For) in Section 179 and Bonus Depreciation
John Deere released their first quarter fiscal 2014 years yesterday and profits were up slightly from the year before. As part of the conference call, they highlighted that US farm receipts are expected to remain high, however, based on their graph in slide # 6, they do show US farm receipts over $400 billion in […]
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IRS Data by Zip Code and County
The IRS just released certain summarized income and expense information based upon taxpayers in a county or zip code for tax year 2011. This information includes the number of returns with AGI between certain dollar amounts such as 0-$25,000, over $200,000, etc. It also provides information on the components of income such as wages, interest, dividends. […]
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When Farmers Barter
We had a reader ask the following question: “If you barter a vehicle for grain do you just put that grain with your other grain sales as there was no 1099 b form?” Many farmers barter goods and services during the year and in many cases, the barter transaction is not reflected accurately on the […]
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Margin Protection for Dairy Producers
Dairy farmers are now starting to enjoy healthy margins after several years of either breakeven or loss margins. The new farm bill provides margin protection for dairy farmers. This margin protection is calculated based on the difference between the “all-milk price” and average feed cost. Average feed cost is calculated as the sum of the price for: […]
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Estimating Inherited Land Values
We received the following question from a reader: “Hello, I am trying to determine how to establish a base value (for capital gains purposes) on some farmland I inherited from my parents.My mother (last surviving parent) died in 2005. We had the land appraised in 2009 but did not actually sell until 2013. I am […]
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Which is Better – ARC or PLC + SCO
Crop farmers will have two program options to consider under the new Farm Bill. Option # 1 is Agricultural Risk Coverage (ARC) which covers the risk of the farmer not receiving targeted revenue between the 76% and 86% band. If “actual” revenues calculated by the USDA fall within this band, then the farmer will collect […]
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One Possible Section 179 Strategy
We had a reader ask the following question: “Should I wait to buy section 179 property until the date 179 property is raised from $25,000 to whatever?” As we have said in a previous post, who knows when the Section 179 deduction will be raised from $25,000 to “whatever”. In fact, Congress may end up […]
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FSA Does Not Understand Tax Return Income
We received some correspondence from a CPA whose is battling with the FSA on the definition of AGI for S corporations, LLCs, LLPs, LPs and other similar entities. The FSA manual on page 6-12 lists the line items from federal income tax returns for computing AGI for purposes of payment limitations. For corporations filing using Form 1120 […]
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10% of Benchmark Revenue not Benchmark Guarantee
A problem with trying to read a 900 page plus farm bill on a small laptop screen is that it is very easy to misread some of the fine print. A reader gave us a comment regarding ARC that the maximum payout is 10% of benchmark revenue, not benchmark guarantee. In this case, the actual amount […]
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Crop Insurance Changes in New Farm Bill
Supplement Coverage Option (SCO) will be available to a farmer who elects Price Loss Coverage (PLC) instead of Agricultural Risk Coverage (ARC). ARC provides similar coverage, however, there is no premium to be paid by the farmer, but there is a limit on the amount of payment that a farmer can receive. With SCO, the farmer can […]