BerganKDV partner and agriculture industry expert Mike Regan is currently attending the National Council of Farmer Cooperatives Annual Meeting in New Orleans. Below are updates from Mike on what he is learning at the conference:
Thursday, February 8 – 11 a.m. – Update on 199A Deduction:
- Since the Section 199A fix was not included in this most recent budget resolution, the next budget resolution is on March 23.
- If the section 199A fix is not in the March 23 resolution, then it may be awhile before it’s included in any congressional bills.
- Depending on what happens by March 23, privately-held entities may need to look into forming new cooperatives. The BerganKDV team will have action plans ready to press quickly forward to form new cooperatives at that time.
Thursday, February 8 – 2 p.m. – Notes from Legal Tax Accounting Panel Discussion:
- Farmers selling to private grain elevators could receive the 199A deduction based on 20% of farm net income.
- Farmers selling to cooperatives would not receive the 199A deduction based on 20% of farm net income, instead the farmer may or may not receive a 199A pass-through deduction from the cooperative they sell the grain to. It would depend on whether or not the cooperative decides to pass through 199A deduction to the farmer selling grain to cooperative.
To learn more about the background on the 199A deduction in light of the Tax Cuts and Jobs Act, start here.