The IRS has cooked up a special mix of fun to generate more revenue. First, they have reduced accelerated depreciation limits to $25,000 and Second, have tightened their position on what is a repair (which is a current year expense and what is a capital improvement which has to be deducted over time). It is enough to drive you to drink, which is why it is referred to as the BAR test. (Betterment, adaption and restoration). If the fix does any of those things, it needs to be depreciated out slowly instead in the year incurred. Betterment = fixes a condition or defect that existed before the purchase of the property, is a material addition to the property; or increases the property's productivity, efficiency, strength, etc. Adaption =a change a new or different use if of property to a use from what you bought the property for Restoration. = puts the property back in working order from non function or rebuilds the property to a like new condition or replaces a major component or structure of the property.
Oil Changes, filter changes and the like which happen more than once during the life span of the item are still allowed as current year expenses.
Don't be surprised if your tax preparer asks more questions this year about your repair category. It would appear that with the recent passage of a higher accelerated expense provision, this issue may not be as critical, as a tax payer maybe able to elect to treat what would be BAR repairs as accelerated expenses.
Who wins with crop insurance?
The company's selling the policies sure do. According to a recent white paper: 'As a result of the significant subsidies crop insurance corporations receive, they consistently generate profits that are considered far above the reasonable rate of return as calculated by economic experts. Between 1989 and 2009, crop insurance companies averaged a 17% return on equity at a time when the 'reasonable' rate was under 13%, according to an analysis done for the USDA. In 2009 alone, crop insurers enjoyed an astounding 26% rate of return, more than double what was considered reasonable by the industry standard for that year.'"
Mapping via infrared spectrum at the one inch level on a field is technology that is already here. The foreign ag service has been using satellite images to predict competing countries yields for decades. That technology is getting cheaper and easier to acquire for private use. Tractors and combines are routinely in communication with GPS locators and mapping programs as farms become more technically advanced. The data that is captured can be used for many purposes.
Here are some things to consider in your farm operations as it relates to data and who it gets shared with.
Is my data anonymous if it includes geospatial information? It is possible to do this if providers are careful to include enough aggregated data so that one farmer looking at anonymous aggregated data cannot reverse engineer the results to figure out whose data it is. Google earth and a good ol plat book can unwind a lot of questions, coupled with a drone flight or two and you are in business.
Can I have my raw, aggregated, or anonymized data deleted? A farmer should be able to delete raw data, but once it is aggregated or anonymized it may be impossible to delete. Data can be like raindrops, once aggregated in a puddle or stream it may be impossible to delete.
A general principle data agreements should expire unless renewed or extended, causing raw data to be deleted. Farmers should know how their data is being used by ag tech providers. If a farmer uploads data to Company A, Company A should not be allowed to transfer the data to Company B, without notice to the farmer.
Farmers should be made aware that disclosure of farm data may be required through subpoena or other court order Any information, stored anywhere in the United States, is subject to disclosure from a potential subpoena or court order. What is important here is that the ag tech provider promise to notify the data owner if it receives a subpoena for the data owner's files. This gives the data owner a chance to intervene with the court that served the subpoena.
Farmers should use these questions when deciding which data sharing technology platform to engage