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Showing posts from December, 2015

Ag Tax Update Available

By Gary Hachfeld, Extension Educator

“Ag Tax Update for Farm Families” is now available on the University of Minnesota Agricultural Business Management website at www.extension.umn.edu/agriculture/business under Farm Tax and Legal Issues in the center of the web page.

The document includes descriptions of several ag tax issues of importance to farm families. Of particular note are the tax laws that were signed into law by President Obama on Friday, December 18, 2015. Most notable of those are the changes in depreciation which extends numerous provisions. The tax act permanently sets Code Section 179 depreciation expensing limit at $500,000 with a $2 million dollar overall investment limit before phase out. Both amounts will be indexed for inflation beginning in 2016. The amounts apply to the 2015 tax year. In addition, bonus depreciation for new or first use equipment has been reinstated under a phase down schedule. This first year depreciation schedule is 50% for 2015 through 2017, 40…

Thoughts and Updates on Year-End Tax Planning

Written by Rob Holcomb, EA
Extension Educator, Ag. Business Management
University of Minnesota Extension

There is a great deal of late-breaking tax information for 2015.  This post addresses the following topics:

Avoiding a Net Operating Loss (NOL)
Carry-over Section 179 and bonus depreciation on the State of Minnesota Return
Deferred Tax Liability
Passage of Extender’s Bill
Changes to the Repair Regulations
Prepaid expenses

NOTE: This information piece offers educational information only and is not intended to be tax, legal or financial advice. For questions specific to your farm business or individual situation, please consult with your tax professional.

Tax planning for farmers in 2015 is going to be a bit of a challenge.  Commodity prices combined with the current cost structure is going to raise the potential for the producer having a net operating loss (NOL) for 2015.  On the other side of the coin, some producers may have a great deal of deferred income rolling into 2015 from the prev…

Intensive Marketing Workshop Scheduled for Grain Producers

By Gary Hachfeld, Extension Educator

The Minnesota Master Marketer Program, six days of intensive marketing training for grain producers, is returning to Mankato in January, February and March of 2016.

The years 2007-2014 were an extended period of prosperity for many grain and soybean producers. This golden era has passed and with prices below production costs, the time is right for an educational program that gets back to the fundamentals of price risk management. The Master Marketer Program focuses on the basics of marketing plan development and profitable pricing decisions.

Sponsored by MN Soybean, the program is spread over three, two-day segments; January 13 & 14, February 10 & 11, and March 9 & 10, 2016. Sessions will be held at Country Inn & Suites Hotel & Conference Center, 1900 Premier Drive, Mankato, MN. Registered producers who cannot attend all six days can send a family member or business partner in their place.

An outstanding line-up of guest present…

Making the Difficult Rent Decisions

By: Pauline Van Nurden, Extension Educator

Farmers have begun pushing the pencil on profitability expectations for the upcoming year. And the outlook is challenging – especially on rented acres. Expenses look to be the same and revenue is down considerably (26% or more for corn, soybeans, and wheat). There will be no easy answer when planning for the 2016 crop year.

As producers make crop input decisions and work on land rent negotiations for the coming year, many options may come to mind to help their bottom line. A natural goal is to decrease expenses. But, these expense cuts cannot jeopardize the yield potential of the crop. Therefore, it is likely difficult to trim much off of seed, fertilizer, or chemical expenses.

The other major crop expense is land rent. According to the FINBIN Database, land rent has been increasing at an average rate of 9% per year over the last 10 years on both corn and soybean acres across all of Minnesota. This may be an area where expenses ca…