2011 beef financial management conference october 6, 2011 amarillo, texas
TRANSCRIPT
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2011 BEEF FINANCIAL MANAGEMENT CONFERENCE
October 6, 2011
Amarillo, Texas
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Income Tax Update
What You Need to Know To Manage Your 2011 Income Tax Liabilities
Estate Planning
Put a Plan in Motion So You Can Keep What is Yours
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Legislative Focus – Past Year
• Economic Stability for the US Economy
• Legislation to put Americans Back to Work
• Estate Tax Legislation
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Income Tax Update
Tools You Need to Use Between Now and December 31, 2011
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Income Tax Update
• Section 179 Expensing• $500k in Immediate Expensing• $2mm Threshold for 2011• New or Used Qualifying Property• Can’t Create a Loss with Section 179• Drops to $125k/$500k Threshold in 2012
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Income Tax Update
• Bonus Depreciation• 100% Write-off of Qualifying Property (2011)• New Property Only• 50% Bonus Revived After 12/31/2011• Bonus Depreciation Expires 12/31/2012
• Section 179 v. Bonus – State Considerations
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Income Tax Update
• Extension of Bush Era Tax Cuts (thru 2012)• LTCG/Dividend Rates – 15%• Maximum Tax Rate – 35%• Host of Other Deductions/Credits Extended
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Farmers & Ranchers
Opportunities:
• Cash Basis Accounting• 5 Year NOL Carryback• Farmer Income Averaging• Estimated Tax Requirements/Flexibility
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2011 Notable Items
• Repeal of Expanded 1099 Requirements• Election out of Bonus Depreciation• Election - Step-Down from 100% to 50% Bonus Depreciation• Reasonable Compensation (S-Corps)
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IRS Audit Statistics
• Individual Returns with Schedule C ($100-$200k) – 4.7% • Individual Returns with Schedule C (>$200k) – 3.3%
• Individual Returns with Schedule F – 0.4%
• Corporate Returns (Other Than 1120-S) – 1.4%
• Large Corporations ($10mm+) – 16.6%
• Partnership & S-Corp Returns - 0.4%
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ESTATE TAXES
ARE YOU READY?
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According to the USDA, if an existing farm or ranch family has not adequately planned for succession, “it is more likely to go out of
business, be absorbed into ever-larger farming neighbors, or be converted to non-farm uses.” In such situations, the impact
on rural communities, the environment, our food supply and the national economy can
be significant.
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Where Things Currently Stand
The 2010 Tax Relief Act
Overview:
• Reduction in Estate/Gift/GST Taxes for 2011 & 2012• Preserves 2010 Estate Tax Repeal• $5 Million Exemption• 35% Top Rate• Unused Exemption Portability• Future Still Uncertain
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What Estate Tax Law Changes Can You Expect?
Post 2010 Tax Relief Act – December 31, 2012
• Estate Tax Laws Set to Revert to 2001 Levels• $1 Million Exemption• 55% Top Tax Rate
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Estate Planning- Questions to Ponder -
•What is the Estimated Value of Your Estate?
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What is the Value of Your Estate?
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Estate Planning- Questions to Ponder -
•How Much Could Your Estate Owe if You Do Nothing?
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How Much Could the IRS Collect if You Do Nothing? (Prior to 12/31/12)
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How Much Could the IRS Collect if You Do Nothing? (Post 12/31/12)
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Estate Planning- Questions to Ponder -
• What is the Timeline for Getting Your Estate in Order?
• What Do You Need to Consider Prior to December 31, 2012?
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LEGISLATIVE FOCUS
MOVING FORWARD….
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Obama Aims for $1.5 Trillion in New Tax Revenue to Reduce Deficit
• Comprehensive Tax Reform• End of the Bush Era Tax Cuts• American Jobs Act• Targeted Business Directed Loophole Closers• The “Buffett Rule”• Handful of Other Obama Measures
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2011 Beef Financial Management Conference
Thank You
Rob Gunther, CPAFrost, PLLC
[email protected](800) 766-9241
Direct: (501) 975-0112