Tuesday, May 14, 2019
This summer Washburn Law School is sponsoring its summer national ag tax and estate and business planning conference in Steamboat Springs, Colorado on August 13-14. The event will be held at the beautiful Steamboat Grand Hotel, and is co-sponsored by the Department of Agricultural Economics at Kansas State University and WealthCounsel. Registration is now open for the two-day event, and onsite seating is limited to the first 100 registrants. However, the event will be live streamed over the web for those who can’t make it to Steamboat.
Key Ag Tax and Planning Topics
The QBID. As we historically have done at this summer event, we devote an entire day to ag income tax topics and an entire second day to planning concepts critical to farm and ranch families. Indeed, on Aug. 13, myself and Paul Neiffer will begin the day with a dive back into the qualified business income deduction (QBID) of I.R.C. §199A and take a look at the experience of the past filing season (that largely continues uninterrupted this year). For many clients, returns were put on extension in hopes that issues surrounding the QBID, or the DPAD/QBID for patrons of cooperatives would get resolved. Plus, software issues abounded, and the IRS issued conflicting (and some incorrect) information concerning the QBID. In addition, the season began with errors in Pub. 225, the Farmers’ Tax Guide. Some states even piggy-backed the IRS errors for state income tax purposes and coupling. That made matters very frustrating.
On the QBID discussion, we will take a close look at the rental issue. That seems to be a rather confusing matter for many practitioners. Is there an easy way to separate rental situations so that they can be easily analyzed? We will break it down as simply as possible and explain when to use the safe-harbor – it’s probably not nearly as often as you think. What is an I.R.C. §162 trade or business activity? How do the passive loss rules interact with the QBID?
For farmers that are patrons of ag cooperatives, how is the DPAD/QBID to be calculated? What information is needed to properly complete the return? Where does what get reported? My experience so far this tax season in seminars is that it is taking me about three hours just to recap and review the QBID and go through practitioner questions that came in during tax season and share how they were answered. The discussion has been great, and at the end of the discussion, you will have a better handle on how the QBID works for your clients. Is it really as complicated as it seems?
Selected ag topics. After a brief break following the QBID discussion, we will get into various ag-related tax topics and how the changes brought about by the TCJA impact ag returns. What were the problem areas of applying the new rules during the filing season? What are the key tax issues that farm and ranch clients are presently facing. Currently, disaster issues loom large in parts of the Midwest and Plains. Also, Farm Bill-related issues associated with CCC loans and the impact on the PLC/ARC decision are important. What about how losses are to be treated and reported? Those rules have changed. Depreciation rules have also been modified. But, is it always in a client’s best interests to maximize the depreciation deduction? What about trades? The reporting of personal property trades has changed dramatically. How do those get reported now? What are the implications for clients?
Cases and Rulings
Of course, the day wouldn’t be complete without going through the key rulings and cases from the prior year. There are always many important developments in the courts and with the IRS. Some are even amusing! It’s always insightful to learn from the mistakes of others, and from others that are blazing the trail for others to follow. We will work through all of the key ag-related cases and rulings from the past 12-18 months.
We will have specific session focusing on depreciation, the passive loss rules (and how to report on the return); ag disasters; and the 2018 Farm Bill. Day 1 will be a full day.
Ag Estate and Business Planning
On August 14, we turn our attention to planning concepts for the farm and ranch family. Joining me on Day 2 will be Stan Miller, the founder of WealthCounsel, LLC. In addition to providing estate and business planning education, WealthCounsel, LLC also provides drafting software. In addition, Timothy O’Sullivan joins the Day 2 teaching team. Tim has a longstanding practice in Wichita, Kansas, where he focuses on estate planning and the administration of trusts and estates.
Recent developments. Day 2 begins with a rapid summary of the development that impact estate and business planning. For most clients, the issue is not tax avoidance given the presently high levels of the applicable exclusion. Rather, the issue is including property in the estate to achieve a stepped-up basis. I will go through recent developments impacting the basis planning issue and other developments impacting charitable giving as well as retirement planning.
Other issues. Tim O’Sullivan will devote a session to dealing with family disharmony and how to keep it from cratering a good estate plan. Tim will also have a separate session on incorporating good long-term care planning into the overall family estate and business plan. This is a very important topic for many farm and ranch families – particularly those that want to keep the family business in tact for future generations. I will have separate sessions on charitable giving; planning for second (and subsequent) marriages; and common estate planning mistakes. To round out Day 2, Stan Miller will devote a session to techniques that can professionals can implement to preserve family held farms and ranches for future generations. This will be a timely topic given the many variables that farmers and ranchers must handle to help their operations continue to be successful.
For more information about the event and to register, click here: http://washburnlaw.edu/employers/cle/farmandranchtax.html
A room block for the conference is available at the Steamboat Grand Hotel and is accessible from the page at the link provide above or here: https://group.steamboatgrand.com/v2/lodging-offers/promo-code?package=49164&code=WASH19_BLK
If you can’t attend, the conference is live streamed. Information about signing up for the live streaming is also available on the first link provided above.
Conservation Easement Seminar
I will also be presenting at another CLE/CPE event in Steamboat on Monday, August 12 immediately preceding our two-day conference. That event is sponsored by the Colorado Cattlemen’s Agricultural Land Trust, the Eagle Valley Land Trust, and the Yampa Valley Land Trust, and focuses on the legal, real estate and tax issues associated with conservation easement donations. I will provide more information about that event as it becomes available.
This two-day seminar is a high-quality event this summer in a beautiful location. If you are in need of training on ag tax and planning related issues, this is the event for you. In addition, the full day on conservation easements preceding the two-day conference is an excellent opportunity to dig into a topic that IRS is looking at closely. It’s important to complete these transactions properly and this conference will lay out the details as to how to do it properly.
I hope to see you either in-person in Steamboat Springs later this summer or via the web. It will be a great event for your practice!