- 12/4/2016 – 12/7/2016
- Chicago, IL
- Speaking Sponsoring
CLA Ag Summit Presentations
CLA was proud to sponsor the 10th Annual DTN/The Progressive Farmer Ag Summit. Our presentations on tax planning (Andy Biebl) and profit interest (Rod Mauszycki) generated a lot of interest and many questions. You can download the presentations here. Take-away tips include:
Overall, as there is a possibility for lower tax rates in 2017, so defer income into 2017 if possible. This also means that if deductions can be brought forward, including paying state tax payments before the end of 2016. Note the state tax payment approach is beneficial if you will not be subject to alternative minimum tax.
Deal with the IRS
Should you find yourself receiving letters from the IRS, it is your best interest to get an experienced tax professional involved. Even if a notice seems routine and accurate, it is best to have a tax professional evaluate it. A tax professional will guide you through an audit—that is not the role of an IRS examiner. Most have never thought dealing with the IRS to be a pleasant experience, and unfortunately, it is getting worse. Therefore, it is key to leverage a professional to minimize the pain.
Ensure proper tax planning even in loss years
You may know someone who had a loss year and thought that tax planning was therefore irrelevant. Quite to the contrary, there are opportunities to carry losses back and recover tax paid. There are multiple options available so bring in a tax professional to ensure the best options are selected.
Use tax brackets effectively
Producers have tremendous tools to control their income. Be sure you are evaluating income and planning before the end of the year in order to use these tax brackets effectively. A tax preparer cannot do much in January and February.
Transfer the farm using profit interest
Profit interest is a great way to transfer your farm via “sweat equity.” Your son or daughter will get a percentage of the profits in the partnership. Over time, the capital account increases. Because acquiring a profit interest is not a taxable event, you can lower estate tax while you transfer business to your children.