Farm Operations

  • Crop Insurance Deferral Update

    David Repp and I are in Mason City, Iowa today for our second presentation of the Day Two of the The ISU Center for Agricultural Law and Taxation Farm and Urban Tax School.  Joe Kristan of the Roth CPA firm presented the first day yesterday.  Unlike yesterday in Sheldon when it was 4%, this morning it had warmed […]

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  • Sale of CRP Land – Is it Subject to the 3.8% Tax?

    We had a reader ask the following question: “Hey Paul, Is farmland with current CRP Income subject to the additional 3.8% NII tax if sold in 2013.  Assuming all other income thresholds are met.” This is one of those questions with multiple answers depending on the facts and circumstances of the taxpayer.  As previously discussed, […]

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  • Trusts Get Hit with New 3.8% Tax too

    We have had several posts on the new 3.8% net investment income tax applying to individuals with net investment income especially rents.  We sometimes forget that this tax will apply to trusts and estates beginning in 2013 and the applicable level is much lower.  All the way down to less than $12,000. This means if a […]

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  • Crop Insurance Deferral Options

    It appears that at least $5 billion of crop insurance claims have been processed this year and with the approximate $1.20 drop in corn prices from the spring, it is likely that additional corn claims will be made.  Unlike last year when almost all claims related to yield losses, this year, most of the claims […]

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  • Update on the Net Investment Income Post

    In our previous post, we gave an example of a farmer selling farm land that was cash rented out and it being subject to the new net investment income tax.  This was designed an illustration, but we have gotten feedback that in many cases this 3.8% tax may not apply to a farmer in this situation. […]

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  • Everything You Want to Know About Net Investment Income Tax (or Not)

    Tony Nitti does a regular column on Forbes.com and he just released a very good recap of the 3.8% net investment income tax that was implemented by Obamacare, but was not applicable until 2013.  Many farmers assume this tax will never apply to them since their adjusted gross income will never be in excess of $200/250,000 […]

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  • Highlighted Inflation Adjusted Amounts for Farmers

    The IRS just released Revenue Procedure 2013-35 last week updating all of the income tax items that are affected by inflation.  Each year right after September 30 the IRS will release these items updated to reflect the annual inflation rate for the year ended September 30.  The government is on a fiscal year that ends […]

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  • Some Thoughts on Section 179 & Bonus Depreciation

    Farmers have gotten accustomed to high levels of Section 179 ($500,000 for the last few years) and at least 50% bonus depreciation since 2008.  For 2013 the levels are $500,000 for Section 179 and 50% bonus, however, for 2014, Section 179 is scheduled to drop to about $25,000 and there will be no bonus depreciation. […]

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  • Calculating Cost Basis Wrong Can Be Costly!

    The Tax Court case released the Moore vs. Commissioner case (T.C. Memo 2013-249) yesterday and this is a very good case of how some taxpayers who really should know better, still attempt to fight a losing cause with the IRS in the Tax Court.  Here is a brief summary of the facts of the case: […]

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  • Social Security Announces 1.5% Increase in Benefits

    On Wednesday, October 30, 2013, the Social Security Administration announced that benefits will rise by 1.5% beginning with January payment.  This represents a $22.50 monthly increase for a recipient receiving $1,500 per month.  This increase will apply to about 63 million Americans receiving benefits. The SSA also announced that the wage base will increase from $113,700 […]

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