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Related Parties For Federal Income Tax Purposes, Guido Van Der Hoeven
Related Parties For Federal Income Tax Purposes, Guido Van Der Hoeven
Rural Tax Education
“Relationships! We all got 'em, we all want 'em. What do we do with 'em?” – Jimmy Buffett
The lyrics of the song “Fruitcakes,” sung by Jimmy Buffett, ask what to do with relationships. Taxpayers need to be aware of potential income tax consequences when dealing with related parties in business transactions. Specifically, the taxpayer must identify the potentially related party and the tax issue that may apply relative to both the taxpayer and the potentially related party. To further muddy the waters regarding this issue, related parties may be defined differently for different income tax transactions. Five common tax …
Farm, Farming And Who’S A Farmer For Tax Purposes, Guido Van Der Hoeven
Farm, Farming And Who’S A Farmer For Tax Purposes, Guido Van Der Hoeven
Rural Tax Education
Meeting the qualifications of farming and being a farmer under the Internal Revenue Code (IRC) allows for special benefits; however, not all agricultural producers meet these qualifications even if they are producing agricultural products, which is why it is vitally important for operators of farms and their tax professionals to understand the IRS tax definitions of farm, farming and farmer. One of the benefits of being classified as a farmer is the exclusion of certain receipts from income as in the case of conservation payments as allowed under IRC Section 175.
Operators of farming businesses may associate the term farmer …