Another article on Section 199, tired of the topic? We might agree, except we recognize the significance to our clients on how this deduction benefits the cooperative or its members.

Just when we thought we had seen it all with the grain price volatility last year! We see a year of extreme price volatility in the fertilizer prices. What a time for the prices to go nuts; many of you had made significant investments in building facilities to allow you to take delivery and inventory many more tons! Who would have thought we would see certain fertilizers sell for over $1,000 and then drop to a couple hundred dollars just a few months later.

Enforcement of the rule has been extended to November 1, 2009 to give additional time for developing and implementing written identity theft prevention programs. There are no criminal penalties for failure to comply, however violators may be subject to financial penalties. In addition, compliance assures the entity’s customers that they are doing their part to fight identity theft.

Form IA 137 is used to compute the ethanol promotion tax credit. This form and credit are quite confusing, but beginning January 1, 2009 an ethanol promotion tax credit is available to taxpayers who: are retail dealers of ethanol blended gasoline, and who operate motor fuel pumps at an Iowa retail motor fuel site. Note that for this credit, a tank wagon is considered a fuel site.

The topic of how much retained earnings is appropriate keeps surfacing as well. One of the concerns that comes up is how the proceeds of a sale of the company would be distributed if the company were to sell. And, with the retained earnings being significant relative to the equity in the names of the members, the concern turns to how vulnerable the cooperative is to an offer that could be perceived as attractive to the members but would end up being a discounted sale of the coop– one heck of a bargain for a buyer.

With their letter dated August 19, 2009, AGP announced their intent to take advantage of the enhanced section 199 deduction effective with their current fiscal year ended August 31, 2009. They will now be computing their section 199 deduction in accordance with the prescribed manner that Gardiner Thomsen brought to you last year.