Farm Taxes
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$2,400 401k Deduction Limit – Why Bother!
Some members of Congress floated the idea of capping 401k contribution deduction to $2,400. This appears to be a non-started, however, we will continue to see more ideas like this and this one may not be dead.
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IRS Makes Electing Step-up Easier
The IRS announced last week enhancements to making the election to “step-up” the basis of a partnership asset. Also, the Social Security Wage Base is going up by $1,500 in 2018.
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Section 2704 Proposed Regulations Bites the Dust
Section 2704 deals with allowed discounts on closely held business entities. The IRS had proposed new regulations last year to reduce those discount. On Monday, the Treasury Department issued an updated report that these new proposed regulations will be withdrawn completely. This is good news for farmers.
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Livestock Sales Due to Drought Have One More Year to Replace
Livestock producers who sold extra livestock due to drought may have another year to purchase replacement livestock. A recent IRS notice indicates who qualifies for this.
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The “Martin” Case Provides Guidance on Self-Rentals
Farmers rent ground to farming entities that they own. This income is usually exempt from self-employment tax and a recent Tax Court case strengthens that analysis.
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Still Not Much is Known About Tax Reform
The “Big Six” released updated tax reform guidance today and so far as usual, not much real guidance was provided. We go over the major details.
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States May Keep an Estate Tax!
Even if Congress eliminates the federal estate tax, there will continue to be an estate tax for many states.
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Inflation Adjusted Items for 2018
Many tax provisions have an annual inflation adjustment. I share one of the key changes and review some of the other ones.
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Will Section 1031 Exchanges Disappear?
Section 1031 tax-deferred exchanges have allowed farmers to roll over gains on farmland sales into new farmland. Tax reform may eliminate this option.
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Will You Be Able to Deduct Retirement Plan Contributions?
Farmers can set up 401k plans for themselves to get a large tax deduction. One tax reform proposal may eliminate this option.