Impact of Tax Legislation on the Farm and Ranch Industry

The Tax Cuts and Jobs Act (TCJA)—a sweeping update to the U.S. tax code—was signed into law at the end of 2017. A recent article published by Successful Farming offers an overview of how the TCJA is expected to impact the farm and ranch industry. Readers should bear in mind that it is impossible to predict exactly how things will play out, however. Author Julie Spiegel touches on the following items of the TCJA:

For individuals, the TCJA includes generally lowered individual income tax rates, a near doubling of the standard deduction, and a suspension of personal exemptions. 

For businesses, impactful items include the retaining of capital gains rates (and their tax breakpoints) and an easing of depreciation rules. While the TCJA preserved like-kind exchanges for real property, it eliminated them for personal property. C-corporation farmers will be happy with the flat 21% corporate tax rate, while s-corp farmers will benefit from the new pass-through deduction. Finally, while net operating loss (NOL) carrybacks were repealed for almost everyone, an exception was made for farmers.

For more details, read the article in full at Successful Farming. Be sure to contact a De Boer, Baumann & Company Ag-specialist  for additional guidance.