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Extension > Agricultural Business Management News > July 2016

Monday, July 18, 2016

Corn and Soybean Input Costs Benchmark Median, Top 10%, Bottom 10% and Difference

By David Bau, Extension Educator

In 2014 and 2015 average total inputs costs divided by yields were higher than the average market price received by farmers in Minnesota who are part of the Adult Farm Management program. Farmers are not able to control market prices but are able to set up a marketing plan to take advantage of when favorable prices are available. Farmers are able to have control of input costs. The two charts in this article are figures from FINBIN data base in a benchmark reports for soybean and corn.

Chart 1 lists 2015 Soybean Input costs by Median value, average of the bottom 10% compared to average of top 10% and then lists the difference between the top and bottom 10%.

Chart 1. 2015 Top Verses Bottom 10% of Soybean Input Costs

Thursday, July 7, 2016

Homestead Classification Rules Change for Business Entities

By Gary Hachfeld, Extension Educator

When doing personal estate planning, one needs to take advantage of any and all estate tax exclusions at their disposal. One important exclusion is the Minnesota Qualified Small Business Property Qualified Farm Business Property estate tax exclusion. For 2016 the exclusion is worth $3,400,000. It will be reduced by $200,000 per year until 2018 when the exclusion will be fixed at $3,000,000. This is in addition to the $2,000,000 per person exclusion all MN residents will have in 2018.

The MN qualified property exclusion applies to a farm business owner’s estate upon their death providing they have followed several rules prior to death. The exclusion rules are as follows: the property must be a part of the decedent’s estate, the decedent had to own the property for 3 continuous years prior to death, the property must have met the requirements of the MN Corporate Farm Law, the property had to have been classified as 2a property and the decedent must have had homestead classification on the property at the time of death. In addition, the qualified family heir must follow some rules to keep the exclusion in place after the decedent’s death. Not complying with any of these rules would result in not being able to use the exclusion to reduce MN estate tax.

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