Farm Operations
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Small Slip Creates Large Penalties!
David Enquist from our Moses Lake, Washington office attended a fruit industry seminar yesterday and even though this is specific to Washington State, the potential penalties can apply in many other states. Here is his report on the meeting: I attended the 2014 Fruit Industry Seminar sponsored by the NSAC on Thursday and thought I’d pass […]
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Grain Gifts – How Are They Taxed?
We had an advisor send us the following question today: “We have a farm client who is a cash basis tax payer. He is considering making a gift of grain to charity in 2014. In your opinion, would it be necessary for him to make that gift out of grain harvested in 2013 or could […]
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Co-Ops and Member Equity Risks
We recently came across an article in a USDA magazine called Rural Cooperatives that discusses the increased risk factors cooperatives have faced including class action lawsuits by members alleging improper management of capital credits. The article can be found here. The article lists a number of reasons for different lawsuits including failing to retire member equity […]
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ACA Makes Health Insurance Taxable – Or Does It?
The Affordable Care Act (ACA) contains various provisions that affect farmers, even those with less than 50 employees. One of the primary provisions concerns the payment of health insurance premiums for employees who are not covered by a group plan. In the past, the payment of these premiums was usually deductible for the farmer/employer and […]
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How Low is Too Low For A Rental Arrangement?
We had a reader ask the following question: “Does leasing cropland to a family member for substantially less than fair market value become “gifting” subject to taxes for value above gifting limit?” The answer, like many tax questions, is “it depends”. The rental of real estate or other properties between related parties is always open […]
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Properly Safeguard Your Private Information
Just a quick reminder to always safeguard your private information. Identity thieves love tax season and tax related identity theft cases is a growing problem. The IRS recently reported identity theft affected 1.2 million taxpayers in the calendar year 2012 and an additional 1.6 million were affected through June 29, 2013, an increase of approximately […]
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Decant a Trust – Not Wine
The Wall Street Journal had an interesting story regarding the decanting of a trust when it is appropriate. When a farmer sets up an irrevocable trust and funds it, it is normally extremely difficult to change the structure of the trust, even by the farmer. This usually involves a costly trip to the courts to […]
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Accounting Boot Camp
Jim Marzolf from our Mankato, Minnesota office and myself are headed to St. Louis on Sunday. We are part of the Farm Financial Standards Council and along with several other members, we are putting on the first (perhaps annual) accounting boot camp in conjunction with the Farm Futures Summit 2014. This boot camp will be […]
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Remember Your Simplified Home Office Deduction
Beginning this year, a taxpayer is allowed to use a simplified home office deduction. In years past, a taxpayer was required to calculate this deduction based upon the office square footage divided by the home’s total square footage. This percentage was then multiplied against the following items: Interest Real estate taxes Insurance Repairs Other home […]
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Related Parties Muck Up a 1031 Exchange
In the North Central Rental & Leasing, LLC v. US decision out of North Dakota just released this week (the cite is AFTR 2d 2013-7045 (I do not have a link to the actual case on a free site yet)), the Court found that the taxpayer’s use of related parties to help accomplish a Section 1031 exchange was […]