Education Commons^™

Sale Of Business Property, Guido Van Der Hoeven

Rural Tax Education

During the course of operating a farm or ranch business, producers will dispose of property (e.g., livestock, equipment, real estate, etc.) used in the business. This can occur in a variety of ways with two common methods being sales of assets and trading (like-kind exchange) of property. The purpose of this fact sheet is to discuss and illustrate correct income tax reporting when business assets are sold.

This discussion also addresses, for income tax purposes, different types of business assets and their tax treatment upon selling them. One common example is the sale of cull breeding animals that were raised …

Like-Kind Exchange (Trade) Of Business Assets, Guido Van Der Hoeven

Rural Tax Education

During the course of operating a farm or ranching business, operators will dispose of property used in the business. Disposition can occur in a variety of ways. A sale and/or trade (like-kind exchange) of property are two common methods of disposition. The purpose of this discussion is to illustrate correct income tax reporting procedures when business properties are disposed of over the course of time through like-kind exchanges.

This discussion will focus on the like-kind exchange of tangible personal property (i.e. equipment and vehicles) commonly known as trade-ins. The point of the discussion is to bring readers a better understanding …

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 …

Choices For Your Farm Operating Loss, George F. Patrick

Rural Tax Education

Many young or beginning farmers may find that their projected farm expenses exceed anticipated farm receipts for the current tax year. These farm losses may be experienced during a start-up period. However other losses may be the result of unexpected events. For some producers, farm losses may generate cash inflows in the form of tax refunds. Tax law allows choices with respect to farm losses. Farm losses realized in one tax year may be carried back 2 years or 5 years1 to obtain refunds of taxes previously paid. If the loss is not carried back, or if the full loss …

Form 1099 Information Returns, Jerry S. Pierce Jr.

Rural Tax Education

The 1099 tax form is used to report various forms of income (other than wages, salaries, and tips) to the Internal Revenue Service (IRS) and to the recipient of the payment. Agriculture producers may both receive Form 1099 information returns and be required to issue them. The Form notifies the IRS and the recipient of the payment. The IRS will then look for the amounts from the Form 1099s to show up on the recipient’s Federal tax return. This article covers many 1099s that producers may encounter.