Ranching and Farming Sayings - An Overview of Conversation Starters

Farmers and ranchers typically sell their Mushroom Growing 4 You products under deferred arrangements which call for payment in a year subsequent to the year the sale actually takes place. Such arrangements allow farmers to avoid current taxation of such sales.Crop-share landlords include in their income, as rent, their percentage of the crop in the year the crop is converted into cash by the farmer. If the landlord materially participates in the production or management of the farm, the income is subject to self employment tax (15.3% currently). In such case, the landlord reports their share of the crop as farm income, which is reported on Schedule F and then Schedule SE. If the landlord does not materially participate, their share of the crop is considered to be a rental activity and reported on Form 4835. Factors which determine whether or not a landlord materially participates includes their involvement in management of the farming activity and decisions as to when and what to plant, the rotation of crops and the type of machinery to be used. The Internal Revenue Code allows farmers who participate in insurance arrangements, which compensate for weather-related damage to crops, or farmers who are eligible for government disaster and drought assistance payments to elect to defer crop insurance proceeds and such government payments received to the tax year following the year of the destruction or damage. The farmer must treat such payments received in a consistent manner from one year to the next.
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