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Optimizing Your Client's Farm Lease

Nebraska CPA
January/February 2023

Throughout the life cycle of farm and ranch operations, it is important to examine the business structures and tools used to meet owner objectives. When owners of closely held farms and ranches objectives adjust, their role in the operations may shift to other family members or to outside individuals taking over the day-to-day operation. This can often take the form of new or modified lease arrangements of farm and ranchland. These leases come in several different forms and, depending on the type of leasing structure used, can have unforeseen tax consequences. By taking a proactive approach to these leases, Nebraska advisors can help their farm and ranch clients optimize their lease arrangements and meet their business, succession, and tax objectives.

In the January/February issue of the Nebraska CPA, Nick Bjornson and Nate Patterson highlight four areas, aside from risk allocation, Nebraska advisors should consider when reviewing and advising clients on agricultural leases: (1) income tax, (2) self-employment tax, (3) estate tax, and (4) USDA program payments.

Read their full article at the link below. 

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