Tuesday, April 11, 2023
Again this summer, Washburn Law School will be conducting two summer seminars focused on farm and ranch income taxation and farm and ranch estate, business and succession planning. The first of the two events will be in Petoskey, Michigan on June 15-16 at North Central Michigan College. Registration is now open and can be accessed here: https://www.washburnlaw.edu/employers/cle/farmandranchtaxjune.html
August Conferences in Idaho
The finishing touches are just about complete on the second two-day event this summer which will be at North Idaho College in Coeur d’Alene, Idaho on August 7-8. Both events will also be simulcast live over the web. The Idaho event will feature a “conference within a conference.” The standard two days will be devoted to farm/ranch income tax and farm/ranch estate and business planning topics. But starting a bit later each day and ending slightly earlier, a second conference will be occurring simultaneously in a nearby meeting hall in the same building on the North Idaho College campus devoted to topics in agricultural law. The them of this two-day conference will be on representing the ag client. Many thanks to the Idaho Bar Association, the ag law section of the Idaho Bar, Prof. Rich Seamon and the University of Idaho College of law and others in helping put this conference together. Details on this these two conferences in Coeur d’Alene will be posted here soon with registration information.
June Michigan Conference
The itinerary for the Michigan event is below. The Idaho tax/e.p./b.p. conference follows the same Day 1 itinerary as the Michigan event, but Day 2 in Idaho will have a few different topics and speakers.
Here’s the itinerary for the Michigan conference.
Day 1 Itinerary
7:30-8:00 a.m. – Registration
8:00–8:05 a.m. - Welcome and Announcements
8:05–9:05 a.m. – Tax Update (Cases and Rulings) (McEowen) [60 minutes tax update CPE]
This opening session takes a look at the most significant tax cases and rulings from the courts and the IRS during the past year that have implications for farm and ranch clients, rural landowners, and agribusiness professionals.
9:05–9:45 a.m. – The Definition of “Farm Income” for Farm Program Purposes (Neiffer) [40 minutes tax update CPE]
Many Farm Service Agency programs grant extra payments if AGI from farming is more than 75% of total AGI. This session will review how FSA determine AGI and why it can be substantially different from IRS calculations.
9:45–10:05 a.m. – Morning Break
10:05–10:30 a.m. – Machinery Trades (McEowen) [25 minutes of tax law CPE]
This session examines the trade of farm machinery with no or low basis for new machinery and the resulting gain computation, combined with substantial depreciation claimed on the new machine.
10:30–10:55 a.m. – Selected Topics - Inventory Method Options for Farmers; How Bonus Depreciation and Expense Method Depreciation Can Work Together for Farm Clients (Neiffer) [25 minutes of tax update CPE]
Tax Reform simplified many accounting methods for taxpayers including farmers. We will review those change and why Section 179 can be more beneficial than bonus depreciation.
10:55–11:45 a.m. – Solar Panel Tax Issues; Other Rental Tax Issues (McEowen) [50 minutes of tax law CPE]
This discussion explores the tax issues associated with the placement of solar panels on farmland and also looks at other tax issues associated with rentals that farming operations often encounter.
11:45–12:45 p.m. – Luncheon
12:45 p.m.– 1:45 p.m. – Protecting a Tax Practice From Scammers (IRS CID) [60 minutes of tax law]
What steps can a tax practice take to protect itself from scams, including those from the dark web? What is good office protocol? What are the essential things that can be done and what are the signs to look for to detect scammers?
1:45 p.m.–2:25 p.m. – Selected Topics - Amending Partnership Returns; Corporate Provided Meals and Lodging; Charitable Remainder Trusts for Retiring Farmers (Neiffer) [40 minutes of tax law CPE]
This session will update the required method of amending partnership returns depending on whether the centralized partnership audit regime applies; a review of the change in corporate provided meals and why charitable remainder trusts can save taxes for a retiring farmer especially with increasing interest rates.
2:25-2:45 p.m. – Afternoon Break
2:45–3:10 p.m. – Easement Tax Issues (McEowen) [25 minutes of tax update CPE]
Rural landowners are finding easement tax issues to be more commonplace. This brief session provides a review of the basic tax issues associated with easements, particularly income tax basis offset issues and the character of the easement payments.
3:10–4:00 p.m. – IC-DISC for Farmers; Disallowance of Cash Method for Farming Activities; Accounting for Hedging Transactions; When to Deduct a Purchased Growing Crop (Neiffer) [50 minutes of tax law CPE]
An IC-DISC can cut a farmer’s income taxes in half – we review when it might apply. More farming activities include non-material participating taxpayers. This can cause the entity to be on the accrual method. The reporting of hedging activities is not always intuitive. We review the requirement and the options and when can a farmer deduct purchased growing crop.
4:00–4:25 p.m. – Soil Fertility Deductions (McEowen) [25 minutes of tax law CPE]
When a farm is purchased an allocation of value can be made to depreciable items. One of those items might be excess fertilizer supply. The IRS has a specific procedure that must be followed for valuing the excess amount. This session examines the IRS approach, the amount to be amortized, the timeframe for amortization and the possibility of recapture.
4:25 p.m. - Adjournment
Here’s the itinerary for Day 2 of the Michigan event (farm estate and business planning track):
7:30-8:00 a.m. — Registration
8:05-8:55a.m. — Current Developments in Estate and Gift Taxation (McEowen) [50 minutes tax update CPE]
This session provides an update of legislative, regulatory and court developments involving federal estate and gift tax including developments involving a decedent’s gross estate, asset valuation, gifts made during life, retirement plans and miscellaneous issues.
8:55-9:45 a.m. – “Top Ten” Strategies For a Successful Farm Business (Rhea and Dikeman) [50 minutes tax update CPE]
As we look toward the next 12 months, several items deserve increased attention for farm businesses. This presentation delivers a Top 10 list of forward-looking strategies to consider for success. Changes in cost, income, inflation, tax laws, and estate planning are some key topics discussed. These will be on the mind of farms and ranches as they navigate the uncertain economic conditions and the impact of higher asset values, growing debt, and rising interest rates. We will also demonstrate the performance distinctions of top 1/3 producers.
9:45-10:05 a.m. — Morning Break
10:05-10:55 a.m. – Taxes in Probate: Form 1041 and Distribution Deductions (McEowen) [50 minutes tax law CPE]
This session walks the practitioner through the completion of Form 1041, the assets included in the probate estate, possible income generating items for an estate, the handling of capital gain or loss, and estate accounting. A discussion of e-filing and electronic signatures will also be included. In addition, common issues associated with the death of a farmer will be addressed.
10:55 a.m.-11:45 a.m. – SLATs – Why It Might be the Best Option for Your Farmers (Neiffer) [50 minutes of tax law CPE]
This session reviews the various trust options available to farm families to transfer assets to the next generation in a tax efficient manner. The session will then review why a Spousal Lifetime Access Trust (SLAT) might be the best option.
11:45-12:45 p.m. — Lunch
12:45 p.m.-1:35 p.m. – Why Social Security is an Investment, not a Tax (Neiffer) [50 minutes of tax law CPE]
Most farmers view social security as an unnecessary tax. However, with optimal planning, social security maybe one of the best investments they ever make. We review how benefits are calculated, why spousal benefits provide even more bang for their buck and some common claiming options.
1:35 p.m.-2:50 p.m. — Tax Strategies for the Farm and Ranch Client (Rhea and Dikeman) [75 minutes of tax law CPE]
This session highlights several changes were made by the Tax Cuts & Jobs Act of 2017; many sunset after 2025 and demand attention for optimal tax planning strategies the next 3 years. We will also explain how rising inflation rates are at times helping reduce tax liability and when it does not. Rising interest rates and inflated asset values are dramatically shifting costs of farm transitions to the detriment of young and beginning farmers. Stepped-up basis is a big thing; we detail how this can be helpful to farm successors. Unintended consequences of high income and options for tax management after year end are analyzed.
2:50 p.m. – 3:10 p.m. – Afternoon Break
3:10 p.m. – 3:25 p.m. – New Estate Planning Clients – Screening Clients and Gathering Information [15 minutes of tax law CPE]
This session takes a brief look at a suggested approach to handling potential new estate/business planning clients. How to screen clients, identify potential problem clients, engagement letters and information gathering as preparatory to determining the appropriate path forward for the client.
3:25-4:25 p.m. – Ethics for Estate Planners (McEowen) [1 hour of tax ethics CPE]
What are the ethical issues facing practitioners working with clients on estate/business and tax planning matters? How might the Circular 230 rules impact tax professionals in the estate and business planning context when income tax advice is involved? This session looks at some of the common issues that can arise, applicable caselaw, and some of the more unusual situations that might arise that present difficult situations for the planner.
4:25 p.m. — Conference Adjourns
The registration link for the Michigan event can be found here:
As noted above, both days of the conference will be broadcast live online. Also, if you business is interested in being a sponsor, please contact me.