- The farmer wanted to ensure the children inherited equitably.
- All parties wanted to limit the liability exposure posed to the farmer as an individual owner and operator.
- The father and his children wanted to limit taxable income and estate taxexposure for the older generation.
- The operation needed to be positioned for future growth.
- Limiting tax impact on contributing operations to new S Corp and Limited Partnerships
- Considering the benefits and burdens of an IC-DISC entity
- Determining how and through which entity owners should be compensated
- Cash-basis methods available for farm activities
- Important factors for tax planning:
- Farm income averaging and qualifying types of income
- Net investment income tax
- Active versus passive investor treatment
- Maximizing the domestic production activity deduction
- Optimizing income for IC-DISC commission purpose
|Jeff Bowman, Ag Team Leader|
- Don't avoid "The Talk" because it is a touchy or fight-triggering subject.
- Obstacles like greed, family disharmony, control freaks, self-interest, and lack of contribution are tricky topics to air. Speak candidly and nip them in the bud with new solutions.
- Write down both small and major goals that every person can agree on.
- Schedule regular meetings with the entire family during the year and be sure that notes or recordings are taken at every meeting.
- Commit and execute the plan!
Our team specializes in succession planning, please watch the video to learn why this is so important for ag families.
- Review the asset with your accountant as part of your estate and charitable giving plan.
- Your accountant will model and calculate your CRT based on your asset's long-term and current market value; this financial modeling will help you better understand the financial implications of a CRT.
- Your attorney will draft the trust agreement.
- Your asset must be funded, and then sold, by the end of the calendar year.
Cynthia Guerrero, CPA and Manager, has been with Grimbleby Coleman since 2005 and utilizes her skills to help clients meet their present needs and future goals.
"Knowing that we can bring clients peace of mind, even if in just one aspect of their lives, is what makes our work worthwhile," she says.
Cynthia is an active member of the Stanislaus Estate Planning Council and is training to become an estate planning expert. Cynthia has served on the Board of Directors for the CalCPA San Joaquin Chapter and has participated in the Relay for Life.
Learn more about Cynthia here.