Earlier this year, the IRS issued changes to the Form 1065 instructions, requiring partners to disclose negative capital tax basis accounts as part of their on-going anti-abuse enforcement effort.   The newly designed Schedule K-1 for the 2019 tax year requires partnerships to report partners’ capital accounting using tax basis as opposed to other methods, including...

The IRS has issued new reporting requirements regarding the 2019 Form 1099-PATR.  One particular concern for specified agriculture and horticultural Cooperatives is Box 7 – Qualified Payments. What are qualified payments under this proposed regulation? Proposed regulations are just that, proposed. They may fluctuate and are often vague to accommodate changes, offering little guidance and...

Our winter newsletter addressed interest deduction limitations under the Tax Cuts and Jobs Act of 2017, Section 163(j). In general, the new section limits the deduction of business interest expense to the sum of the following: 1. Business interest income, plus 2. 30% of the adjusted taxable income, plus 3. Floor plan financing interest Your...

In mid-June the IRS released proposed regulations (156 funfilled pages) providing guidance to cooperatives and their patrons regarding the deduction for qualified business income (QBI) under section 199A(a) of the Code. This guidance also included specified agricultural and horticultural cooperatives (“specified cooperatives”) and their patrons regarding the deduction for domestic production activities under section 199A(g)...

The IRS recently released a proposed revenue procedure providing computational guidance on methods and appropriate sources of data for calculating W-2 wages for purposes of section 199A(g) of the Internal Revenue Code (IRC). The notice provides three methods for calculating W-2 wages, limiting the amount of the deduction available to agricultural and horticultural cooperatives to...

As the calendar has flipped to 2019, I wanted to provide you an update and reminder on accounting standards that may now be in effect or are getting closer to implementation so that you will be prepared. Revenue Recognition (2014-09) In 2014 the Financial Accounting Standards Board (FASB) issued new revenue recognition standards. The impact...