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We Knew It Was Coming!
The passage of Obama Care created the 3.8% net investment income tax on all unearned income such as interest, dividends, rents, passive income, etc. This extra tax only applies if your income is over a certain threshold ($200,000 single and $250,000 for married couples). This tax does not apply to earned income of partnerships and […]
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Be Careful What You Wish For!
Chris Clayton of DTN Progressive Farmer just did a post on their website regarding possible lawsuits for those counties where no ARC-CO payments were made for the 2014 crop year. The attorney’s are complaining that the FSA did not follow the directions of the Farm Bill when it came to determining crop yields for each […]
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Is Crop Insurance Values That Much Lower Than Last 10 Years
Expanding on our previous post, I decided to work up a table showing the insurance values over the last 10 years plus an estimate for this year. I based it on an APH for 2015 of 185 with a 2 bpa adjustment for each year going back. Below is the chart showing these values for […]
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Lowest Spring Crop Insurance Price in Last 10 Years?
February is the month for determining the final “spring” discovery price for crop insurance purposes. This year is shaping up to the be the lowest insurance price for the last 10 years. From 2007 to 2015, the lowest corn spring insurance price was $3.99 in 2014, $4.04 in 2009 and $4.06 in 2007. Last year […]
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Does Cottonseed Oil Qualify for Other Oilseed Treatment Under 2014 Farm Bill
The USDA just announced that they will not include cottonseed as an oilseed. The cotton industry and other farm groups have been lobbying USDA to include this as an other oilseed and likely then allow cotton growers to elect PLC on these acres and receive a payment at least for the next few years assuming […]
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Pre-1977 Purchases May Get 100% Step-up or Not!
We had a reader respond to our last post with the following: “One additional thought on the “Farmer Brown purchased 40 years ago” example. If it was a pre-1977 joint interest, his wife could get a 100% basis step up, if the funds to purchase the property and pay for the mortgage came solely from […]
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What Gets a Step-Up
I continue to get questions regarding how much of a step-up in cost basis farmland gets when someone passes away. Again, as with most tax questions, it depends. The key factor for determining the step-up is who owns the land. Is it owned by the person who passed away or is it owned by an […]
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Continued Headwinds for Ag
The Federal Reserve Bank of Kansas City provides several publications throughout the year on trends in the farming sector for their region (Kansas, Missouri, Nebraska, Oklahoma, Wyoming, Colorado and New Mexico). In an article titled “Supply and Demand Fundamentals Weighing on Ag Economy”, it does a good job of outlining the headwinds that Ag still […]
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Mr. Market Wants Its Excess Profits Back
I have been meeting with several farmers over the last few days and we have been discussing how low crop prices will affect their bottom line profit. Mr. Market has a history of allowing excess profits to be earned by farmers (think of the first and second world war, the Russian Grain trade of the […]
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Top 10 Reasons You Might Need Accrual Accounting
I spoke this morning in St. Louis at the Accounting Boot Camp on using accrual accounting for farm operations and why it is important. To start off the talk, I came up with the Top 10 Reasons why you might need accrual accounting: 10. You think working capital has something to do with politicians in […]
