Tony Crowell to provide an overview of legal issues associated with oral farmland leases at upcoming Indiana Farm Bureau virtual webinar

Huntington County and Wells County Farm Program Meetings

The Huntington County and Wells County FSA offices in partnership with Purdue Extension will be conducting Farm Program Meetings.  The meetings will provide information to producers about the Agricultural Risk Coverage Program (ARC), Price Loss Coverage Program (PLC), and decision making tools for the programs.  The Huntington County Meeting will be Thursday, December 19th at 9:30 a.m. at First Merchants Bank Heritage Hall at the Huntington County 4-H Fairgrounds.  The Wells County Meeting will be Wednesday, December 18th at 9:00 a.m. at the Wells County 4-H building.  

For more information on ARC/PLC, visit:

https://www.fsa.usda.gov/programs-and-services/arcplc_program/index .

Attention farmers...

Just a quick reminder, if you received a payment from the Market Facilitation Program, it is taxable and cannot be deferred.

If you have any questions about this, please contact your tax adviser or our office.

199A regulations finalized!

In regard to rental income for farm landlords:

1) A Safe Harbor provision provides that rental income will automatically be Qualified Business Income (QBI) that qualifies for the 20% deduction if:

a. Separate books and records are maintained for each real estate enterprise;

b. Taxpayers provide at least 250 hours of actual work for each real estate enterprise between 2019 and 2022;

i. The work must be related to maintaining the real estate, including (1) advertising to rent, (2) negotiating and executing leases, (3) verifying information, (4) collection of rent, (5) daily operation, maintenance and repair of property, (6) management of real estate, (7) purchase of materials, and (8) supervision of employees and independent contractors.

ii. Work related to financial or investment management services, such as (1) arranging financing, (2) procuring property, (3) studying and reviewing financial statements or reports on operations, (4) planning, managing, or construction of long-term capital improvements, or (5) traveling to or from the real estate is NOT included.

iii. Beginning in 2023, taxpayers only need these hours in three out of five years.

c. Taxpayers maintain contemporaneous records, including time reports documenting the 250 hours; and

d. Taxpayers include a statement on their returns verifying that the rental enterprise meets the above requirements.

2) The Safe Harbor provision is not available for triple-net leases, even if the landlord is able to prove 250 hours of work.

3) A farm landlord does not need to meet the Safe Harbor rules if the rent income is paid by a farm operation which has common ownership with the landlord.

4) The final regulations expanded the definition of related parties for determining common ownership to include brothers and sisters in most situations. Rental income received by an individual or pass-through entity (as landlord) from an entity under common ownership with the landlord is QBI.

5) Rents paid by a C corporation (as tenant) under common ownership with the landlord will NOT automatically qualify the rental income as QBI. A farm landlord receiving rental income from a C corporation will need to meet the Safe Harbor rules shown above. In that situation the rental income likely would become subject to self-employment tax.

Call our office to schedule an appointment if you are concerned about how these regulations could impact your operation.

Do not become the victim of a tax scam!

Tax season is rapidly approaching

…and along with the tax season come tax scams!

The top four tax scams are (1) identity theft, (2) phone fraud, (3) fake websites, and (4) “free money” refunds.

The IRS will NEVER call or email you.

If you think you have been the victim of identity theft, contact the IRS Identity Protection Specialized Unit at 800-908-4490

If you think you have been called by a person fraudulently claiming to be from the government, contact the IRS Protection Line at 800-829-1040 or use the Federal Trade Commission (FTC) Complaint Assistance at FTC.gov

If you receive a phishing email, forward that email to phishing@irs.gov.

Finally, be on guard against any tax preparer that promises a “free money” tax refund, charges a large fee, or does not provide you with a copy of your tax return.

Indiana Farm Bureau 2018 State Convention

Indiana Farm Bureau is holding its annual state convention December 6, 2018 - December 8, 2018 at the Grand Wayne Center in Fort Wayne. If you are attending this event, be sure to stop by our booth!

Farm Business Law Seminar

The National Business Institute is holding a Farm Business Law Seminar on December 7, 2018. Michelle Adler will be presenting a discussion on Medicaid Planning for Farmers and Tony Crowell will be presenting a discussion on Financing, Buying and Selling Farm Land and Businesses. If you have questions regarding these areas, be sure to call our office so we can help you!

2019 Tax Update

Tax Change for 2019

The IRS has increased the applicable exclusion amount for estate and gift tax purposes and the generation skipping tax exclusion to $11,400,000 per person and $22,800,000 per married couple, for the calendar year 2019. Rev Proc 2018-57

The annual gift tax exclusion will remain at $15,000 for the calendar year 2019. Rev Proc 2018-57

USDA Announces Assistance for Farmers

The USDA recently announced payouts under the Market Facilitation Program for farmers harmed by tariffs.  Farmers will be able to sign-up with the FSA after September 4, but don’t rush because FSA offices are still being trained. Initial payouts will be as follows:

Soybeans: 50% of bushels produced multiplied by $1.65 per bushel

Corn: 50% of bushels produced multiplied by $0.01 per bushel

Dairy: 50% of hundredweight produced multiplied by $0.12 per hundredweight 

Pork: 50% of head produced multiplied by $8.00 per head  

Estate & Succession Planning Seminar

The Indiana Agricultural Law Foundation is holding its 5th installment of the Estate & Succession Planning for the Family Farm program on July 17, 2018. Dan Gordon will be presenting a discussion regarding Elder Care Planning and how not to lose the farm to the nursing home. 

If you want to know how to save your farm from the nursing home, contact our office today!