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Tag Archive: "farm income"

How Does Section 1231 Work?

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July 20th, 2011

We had a reader ask the following question: “I’m thinking about selling a tract of timber on land that was gifted to me 7 years ago. What can I expect the tax consequences to be? I’m a self-employed farmer.” We have done a couple of posts lately on capital gains treatment of the sale of […]

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Minnesota Farmers See 63% Reduction in Net Income for 2009

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July 7th, 2010

Of the 2,401 Minnesota farms included in the “FINBIN” survey for 2009, the median farm saw a 63% decrease in net income from $91,242 to $33,417.  Each year, the Center for Farm Financial Management performs a survey of Minnesota farmers.  Their response for 2009 represented about 3% of overall farms and about 10% of the […]

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Minimize Your Fixed Cost Amortization to Maximize Your Profits

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February 9th, 2010

To maximize your profit for your farm, it is very important to determine what your annual fixed costs are and determine if you are maximizing your amortization of these costs on your farm.  Fixed costs are those costs that do not materially change with production increases and decreases.    Some examples of fixed costs are: […]

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Top-Third vs. Bottom-Third

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January 11th, 2010

The Kansas State University Department of Agricultural Economics periodically produces a recap of the high 1/3, mid 1/3 and low 1/3 of various farms in their state.  They just released the latest analysis for corn, sorghum, wheat, soybeans and alfalfa for the three years 2006-2008.  The total number of crop farms reporting for all three […]

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Farm Profit Trends 1998 to 2008

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August 6th, 2009

The Iowa Farm Business Association, comprised of various farm management companies, recently issued a nice 4 page newsletter that had a lot of good information on farm profit trends.  All of this information relates to farms in Iowa but the trends show hold true for most states that grow corn and s0ybeans. The newsletter recapped […]

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Your Time is Worth Something

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June 12th, 2009

As a CPA, I get asked many times by small business owners what their business is worth.  As part of calculating that value we usually work up what the net bottom line earnings of the business is.  To detemine that, we take the profit and loss of the company and make certain adjustments.  Normally, we […]

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The Budget is Your Road Map

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April 24th, 2009

Most farmers prepare a budget at the end of the year to present to their bankers and then promptly put it away and forget about it until the following fall.  I like to envision a budget is similar to a road map.  A map has many ways to get from point A to point B.  […]

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When Average is Great

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February 11th, 2009

Uncle Sam offers a tax advantage to farmers and fishermen that no other taxpayers receive. When your income is very high compared to previous years, the tax laws allow you to assume that you were able to average all of your farm income over a four year period. This can save you several thousand dollars […]

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