TITLE

Tobacco buyout has tax implications

AUTHOR(S)
Osborne, Daniel
PUB. DATE
March 2005
SOURCE
Southeast Farm Press;3/9/2005, Vol. 32 Issue 8, p17
SOURCE TYPE
Trade Publication
DOC. TYPE
Article
ABSTRACT
The article focuses on the tax implications on tobacco buyout. Almost inevitably when farmers receive a payment, there are tax implications. Such is the case with the tobacco buyout. The tax treatments and considerations will vary depending on whether the payments are received as a quota holder or producer. Payments to quota holders will be taxed as long-term capital gains that is 5 percent or 15 percent for years 2005-2008 and 10 percent or 20 percent after 2008. Payments will be taxed as short-term capital gains at the ordinary tax rate if held one year or less. The taxable gain, whether long-term or short-term, equals the total payments less the cost basis. Payments will not be subject to self-employment taxes unless the quota holder is a dealer of tobacco quota.
ACCESSION #
16394802

 

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