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Tax Strategies For U.S. Farmers: Tax Reduction And Averting Risk

Author

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  • Jeff Decker
  • Richard Ray

Abstract

This paper presents tax planning strategies specific to farmers. We discuss several opportunities in which a farming operation can either reduce its current tax liability or preserve tax benefits for the future. Under current U.S. tax laws, special provisions exist that are designed to offer the U.S. farmer favorable tax treatment. We specifically highlight these provisions in an effort to remind others of their existence. In addition, there are other provisions within U.S. tax laws that are not so favorable to the U.S. farmer. We provide some suggestions on how the farmer can bypass these rules simply by altering facts and circumstances, which is a lawful behavior. For example, the first strategy we discuss requires the U.S. farmer to plant a secondary crop in order to accelerate cost recovery on an irrigation system. By planting a secondary crop, the farmer has changed the facts and circumstances. Finally, some of the strategies we discuss contain potential risks. We specifically emphasize these risks areas and offer suggestions on how to avoid them

Suggested Citation

  • Jeff Decker & Richard Ray, 2017. "Tax Strategies For U.S. Farmers: Tax Reduction And Averting Risk," Accounting & Taxation, The Institute for Business and Finance Research, vol. 9(1), pages 49-61.
    • Handle: RePEc:ibf:acttax:v:9:y:2017:i:1:p:49-61
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    More about this item

    Keywords

    Tax Planning; Farming; Agriculture; U.S. Tax Laws;
    All these keywords.

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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