RETIREMENT PLANNING BY FARMERS: OPPORTUNITIES IN THE TAXPAYER RELIEF ACT OF 1997

Relatively few farmers regularly use tax-favored retirement accounts to diversify long-term farm assets with nonfarm savings. The Taxpayer Relief Act of 1997 creates new investment opportunities for both IRAs and regular capital assets. Complex tradeoffs exist among new tax incentives, possible resulting in few overall gains in diversification.Income taxes, retirement planning, capital gains, IRAs, Consumer/Household Economics, Financial Economics,

INCORPORATING THE 1990 FARM BILL INTO FARM-LEVEL DECISION MODELS: AN APPLICATION TO COTTON FARMS: COMMENT

Crop Production/Industries,

WILL SAVINGS ACCOUNTS (EVER) BECOME PART OF U.S. FARM POLICY?

Various forms of farmer savings accounts have been proposed to help U.S. farmers manage their income variability. Financial incentives include tax-deferral and government matching deposits. This paper estimates farmer eligibility, program size, and benefit distributions for two congressional proposals: FARRM accounts and a farm counter-cyclical savings account program.Agricultural and Food Policy, Agricultural Finance,

The Taxpayer Relief Act of 1997: Provisions for Farmers and Rural Communities

Under the Taxpayer Relief Act of 1997, most farmers will pay less Federal income tax, and farm families will find it easier to transfer the family farm across generations. The new law--the tax portion of 1997 legislation to balance the Federal budget by 2002--emerges from years of debate on proposals for tax simplification, broad tax reduction, and targeted relief for capital gains and estate taxes. The legislation is expected to generate a net tax reduction of $95 billion over 5 years for all taxpayers. A number of general and targeted tax relief provisions will reduce Federal taxes significantly for farmers and other rural residents, but also will increase the complexity of both Federal income and estate taxes. Farmers are expected to save more than$1.6 billion per year in Federal income taxes and $150-200 million in Federal estate taxes.farm taxation, Federal income tax, family farm, capital gains, estate taxes, tax reform, tax policy, agricultural assets, farm income variability, Agricultural Finance, Public Economics,

EFFECTS OF FEDERAL TAX POLICY ON AGRICULTURE

This report analyzes the effects of the current Federal tax code on farming and evaluates tax proposals to assist beginning farmers. Investment, management, and production decisions in agriculture continue to be influenced by Federal tax laws. Farmers continue to benefit from both Federal income and estate tax policies targeted to agriculture. These provisions exert upward pressure on farmland values and help support ongoing trends that increase the number of very small and large farms. However, the influence of the current tax structure with lower marginal tax rates and a broader income base is less than in earlier decades and may be small relative to government farm programs. Tax proposals to assist beginning farmers would likely increase the availability of land for lease or purchase, but would do little to make land more affordable.Federal tax policy, income tax, social security tax, structure, small farms, estate and gift tax, capital gains, farm losses, Agricultural Finance, Public Economics,

Structural and Financial Characteristics of U.S. Farms: 2001 Family Farm Report

Family farms vary widely in size and other characteristics, ranging from very small retirement and residential farms to establishments with sales in the millions of dollars. The farm typology developed by the Economic Research Service (ERS) categorizes farms into groups based primarily on occupation of the operator and sales class of the farm. The typology groups reflect operators' expectations from farming, position in the life cycle, and dependence on agriculture. The groups differ in their importance to the farm sector, product specialization, program participation, and dependence on farm income. These (and other) differences are discussed in this report.Agricultural Resource Management Study (ARMS), family farms, farm businesses, farm financial situation, farm operator household income, farm operators, farm structure, farm typology, female farm operators, government payments, spouses of farm operators, taxes, Agricultural Finance, Farm Management,

Do Farmers Need Tax-Deferred Savings Accounts to Help Manage Income Risk?

Farmers' incomes vary with market conditions and yields. The Federal Agriculture Improvement and Reform Act of 1996 places more risk management responsibility on farmers. Savings accounts are one mechanism that could help farmers manage their income variability. Tax incentives have been proposed to encourage the use of such savings accounts, with benefits expected to accrue both to individual farmers and their communities. Participation rules tied to farm income may favor larger, more prosperous farmers. Because many farmers already save or use other methods to smooth household consumption, tax-advantaged accounts may largely substitute for existing risk management methods and offer limited additional overall benefits to the farm sector and rural areas

TAX-DEFERRED RISK MANAGEMENT ACCOUNTS FOR FARMERS

Income tax incentives directly affect the economic feasibility of proposals for tax-deferred risk management accounts. Data indicate that despite clear financial advantages from tax deferment and reduced income variability, income targeting may preclude many farmers from contributing enough money for accounts to be effective

RETIREMENT PLANNING BY FARMERS: OPPORTUNITIES IN THE TAXPAYER RELIEF ACT OF 1997

Relatively few farmers regularly use tax-favored retirement accounts to diversify long-term farm assets with nonfarm savings. The Taxpayer Relief Act of 1997 creates new investment opportunities for both IRAs and regular capital assets. Complex tradeoffs exist among new tax incentives, possible resulting in few overall gains in diversification