Farm Taxes
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Can My IRA Own Farmland?
We continue to get this question fairly often. A farmer has some excess cash in their IRA or retirement account and would like to purchase farmland since they feel this is a better investment than what they can get from the bank. Yes, they can do this, BUT, there are many potential drawbacks. First, they […]
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New Overtime Rules Update
Last week, we did a post on the new overtime rules. Some of the wording may have been a little vague, so we are updating via this post. First, an agricultural worker is not required to be paid “overtime”; however, the worker is required to be paid for any hours worked by the employee. If […]
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Will Your Farm Losses be Limited?
A few years back, Congress passed a new law limiting farm losses if the farmer received an “applicable subsidy” or got a Commodity Credit Corporation (CCC) loan. If the rules applied, the farmer could only deduct the greater of: $300,000, or Total net farm profits over the last 5 years These rules applied to all […]
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Will You Need to Pay Overtime for Your Farm Employees?
Most farmers assume that they are not required to pay overtime for any farm work performed by their employees. Although this is correct, we need to make sure that farmers understand what work is exempt under the Agricultural Work exemption and what work might be exempt under other provisions. This blog post is not designed […]
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LLC Does Not Provide Legal Protection (if you mess up)
Many farmers have created limited liability companies (LLC) to hold equipment, especially semi tractors and trailers. The assumption is that by putting these assets into a LLC, the farmer is shielded from any legal liability in case of an accident. The answer, like most questions I get, is it depends. If the farmer runs the […]
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A Trade of Equipment on an Operating Lease can be Costly
With tougher times in the farm industry, equipment companies and banks have been promoting operating leases to farmers. In many cases, the farmer will “trade-in” equipment in return for not having to pay any of the operating lease payments or making a large down payment on the lease. If the trade of equipment was for […]
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How Will New Lease Accounting Rules Affect You?
If you borrow money from a bank for farm operations, you will likely have loan covenants that call for certain net worth to debt ratios. Recently released accounting standards regarding lease accounting may require your bank to change these covenants. Knowing how these new rules will affect your farm is important so that you can plan […]
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Obama Administration Expands Overtime Pay Eligibilty
Many of you may have been following the new expanded overtime eligibility rules saga associated with the proposed Department of Labor regulations (DOL). We finally have some clarity and it appears the new overtime rules may extend to an estimated 4.2 million workers. The rule increases the salary threshold that salaried workers are entitled to […]
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Make Sure to Lock In Low Rate Family Loans
The IRS just released the minimum interest rates for June 2016 and they continue to be at record lows. These tables represent the minimum interest rate that you need to charge on loans, etc. If you elect to not charge any interest, the tax laws require you to “impute” interest based upon these minimum rates. […]
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When Should You Pay Your Spouse and Kids?
My father was 47 when I was born (I am the oldest of three kids) and he elected to start receiving social security at age 62 (when I was 15). When a person elects to take social security benefits before full retirement age, there is a limit on how much you can earn before you […]