Farm Operations
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What Is The Tax Rate On Gifted Equipment?
We had a reader ask the following question(s): “Paul, in regard to the capital gain question-we are in the process of purchasing a new corn planter. If we sell the old one for cash, how much will the capital gains tax be on it? 15% or normal income tax rate? It was gifted to us […]
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IRS Gives Three Month Extension to File Form 2290
We wrote a post a couple of weeks ago about the possible late filing of form 2290 to report the excise tax owed on semi-trucks owned by farmers for the period ended June 30, 2011. The IRS has just issued release 2011-77 indicating there is an automatic three month extension until November 30, 2011 to […]
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Think Savings Account for Partner’s Capital Account
In almost 30 years of being a CPA, I have found partnership taxation to be one of the most complicated areas of taxation, both for other CPA’s and for clients. Partnerships involve both inside and outside basis, step-up or down in cost basis for certain transactions and many other compilations that are not there with […]
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Expect Filing Delays of Form 2290 for Many Farmers
The IRS has indicated in a couple of announcements (most recent one here) that the form 2290 excise tax return for the year beginning July 1, 2011 and ending June 30, 2012 and for the quarter beginning the same date will be delayed for some unknown time. As was with the new tax laws passed […]
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Dying Days of Ethanol Subsidies?
The Wall Street Journal in today’s paper had a good article on how ethanol subsidies are even closer to being eliminated. Under the proposed deficit-reduction plan proposed on Thursday, the 45 cents a gallon blenders credit would be eliminated, however, more than $600 million of aid would be given to service stations to help promote […]
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Extra Year for “Prairie Pothole States”
The USDA announced on Thursday, June 30, 2011 that the “Prairie Pothole States” of Montana, North and South Dakota, Minnesota and Iowa will have one extra year to use in their prevented planting insurance coverage. Normally, the prevented planting coverage insurance requires one crop in the last three years. In these states, for many farmers, […]
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What’s Your RLU?
A farm enterprise must be able to generate enough revenue and net income to support at least one farm family which I call a “living unit”. A farm operation should calculate how much revenue the farm generates each year and divide that both by the number of full-time equivalent employees (FTE) and “living units”. To […]
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IRS Raises Mileage Deduction by About 8%
Effective July 1, 2011, the allowed mileage deduction and reimbursement rate is increased from 51 cents per mile to 55.5 cents. Don’t ask me why the IRS uses half cents for these rates, but they do. This means you can use 51 cents for your miles incurred by June 30 and the new rate after […]
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Question on What is a Hedge?
We had a reader ask the following question: “On taxing options, you state that hedges apply to crops that you raise or feed. However, you say if you raise wheat but have no livestock an option would not be a hedge. I am confused. “ The tax definition of hedging is when a farmer has […]
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Women Own 47% of Iowa Farmland
I noticed a post on the Iowa Farm Union that indicated 47% of the farm land in Iowa is owned by women. I think this trend will continue and there may be a good chance that this percentage may be in excess of 50% at some point in the near future. Women appear to express a […]