Farm Leadership
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2014 Cash Rents Equals Negative Returns For Farmers
In a post from the University of Illinois today, they essentially said that based on current crop prices, farmers who are cash renting ground in Illinois will either make about $10 per acre or in the case of Southern Illinois farmers lose about $30 per acre. These numbers are for the averages. In areas where high […]
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The Rich Are Different – They Have to Pay More
The Tax Court released a very interesting and to some degree an entertaining case on Tuesday. Michael D. Brown was considered a super life insurance agent to the Forbes 400. He normally would not handle any life insurance policies with a face value less than $10 million and in many cases, he was the agent […]
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Losses Can Offset Investment Income
Another nice feature of the final net investment tax regulations released last week is that certain losses are now allowed to offset other net investment income. In the original proposed regulations, you could not have a loss (such as the sale of stock) reduce your other net investment income. Once you reached zero, you were […]
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Bonus Payments Are Ordinary Income – Not Capital Gains
The Tax Court issued the Dudek case today concerning whether upfront bonus payments received from an agreement to allow an oil and gas company to lease property is considered ordinary income or capital gains. In the case, Mr. Dudek, a CPA (why are some CPAs more likely to go to tax court when they know […]
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More Good News on Calculating Invesment Gain
We will probably be doing a few posts this week on the net investment income tax regulations issued by the IRS last week. The IRS also issued new proposed regulations regarding how to calculate the amount of gain required to be included in investment income when you sell a partnership or S corporation interest. In […]
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Final Net Investment Income Regs Have Good News For Farmers
We have had several posts in the past about how the proposed net investment income tax Regulations indicated that cash or crop-share rents paid by a farmer’s operation to him or a pass-through entity would be subject to the 3.8% net investment income tax. In Final Regulations issued earlier this week, the IRS changed their […]
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Crop Insurance is not Taxed Before Receipt!
We have gotten several calls and emails from readers and clients regarding when crop insurance is taxed. The confusion seems to relate to the revenue programs where the crop insurance received is based on price not yield. The confusion arises since these types of claims can not be deferred. However, if the crop insurance claim […]
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Senate “Pool” Process to Increase SE Taxes?
The Senate proposals on tax reform contain a new method of computing depreciation as discussed in our last post. With this new pooling process, it appears that in many cases, farmer’s self-employment taxes will be greater than under current law. For example, if a farmer purchased a new tractor in 2010 for $300,000 and fully […]
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Senate Proposals on Depreciation
We posted yesterday on the new Senate tax reform proposals and how it might affect farmers. Today’s post will dig even further into the depreciation changes. First, the positive is that Section 179 has been increased to $1 million from the current $500,000. The proposal also extends the $500,000 limit through 2014 with the new $1 […]
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MAJOR Farm Tax Law Changes Proposed by Senate
WARNING – This Post is longer than Normal. The Senate released details on their proposed changes to the income tax laws and there are several major changes proposed that would apply to farmers and many of these changes are major. First, I will list all of the changes that are clearly beneficial to farmers: Section […]