2018 Spring Farm

2018 Logan County Farm Outlook Magazine LINCOLN DAILY NEWS March 22, 2018 Page 9 genie may be out of the bottle and will be hard to put back in 4 . Teresa Castanias, a Certified Public Accountant, led the effort to get this special provision for cooperatives into old Section 199. She thinks that it is possible that there won’t be a fix negotiated. “From what I have seen, negotiations are going nowhere at this point. Everything they try hurts someone, and they are fixated on the “double counting” aspect of this (income to the patron is a deduction for the coop). Current 199A(g) doesn’t have a double counting problem though, so I am not sure why they haven’t worked more from that angle. The 199A(g) benefit should still be pretty good for most ag coops. From what I hear, there is a growing interest in keeping the law as is from all parties involved. Particularly in the farm sector where word is out in the press that farm income is down to a 12 year low nationwide. I was at an ag coop conference last week, and that was the general mood of the participants that I talked to 4 .” Castanias said, “Of even greater interest is that the provision creates a huge opening for professionals to work around the Section 199A exclusions. Worker owned cooperatives in the fields of health, law, accounting, etc. are not out of the question 4 ” to take advantage of these tax benefits. If legislators are going to make changes, they will want to make them soon. The longer the delay, the more costly it is to the government and to non-cooperative grain and livestock buyers. It also becomes, as you note, the status quo, and harder to reverse 4 . Locally, 199a is having quite an impact. However at this time Paul Crombie, CEO of Elkhart Grain, a private grain company said, “In this post harvest time the effect is hard to gauge but we don’t greatly feel the full effect of 199a yet.” Crombie said, “Legislators indicated 199a had unintended consequences they were going to fix. If it stands as written, producers will sell grain to coops. So far the U.S. Senate is not releasing any language, and both producers and consumers are anxiously awaiting the specific changes in the language of the bill. The advantage of selling to a coop at today’s prices would amount to about 70 cents on a bushel.” Elkhart Grain has had some limited discussion on becoming a coop. Crombie believes that if it stands, then businesses outside of ag may find their way to also get the tax credit. Continue 8