Are you Doing Deferring Payment Contracts? Take This Step

Dec 28, 2021 at 10:19 AM CST
Deferred grain contracts are helpful tax planning tools. Simply, grain is sold at the local elevator, but payment is deferred to a future date. Most times, that payment date would be the first of the ensuing calendar year, says Paul Neiffer, principal with CLA and author of “The Farm CPA” blog. “Under current tax rules this is a favorable treatment because even though we've sold it and locked in the price, we're not going to collect the income until 2022, and that is when we're going to pick up the income on the tax return,” he says.

Dec 28, 2021 at 10:19 AM CST

Deferred grain contracts are helpful tax planning tools. Simply, grain is sold at the local elevator, but payment is deferred to a future date. Most times, that payment date would be the first of the ensuing calendar year, says Paul Neiffer, principal with CLA and author of “The Farm CPA” blog. “Under current tax rules this is a favorable treatment because even though we've sold it and locked in the price, we're not going to collect the income until 2022, and that is when we're going to pick up the income on the tax return,” he says.