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2011 BEEF FINANCIAL MANAGEMENT CONFERENCE
October 6, 2011
Amarillo, Texas
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
Legislative Focus – Past Year
• Economic Stability for the US Economy
• Legislation to put Americans Back to Work
• Estate Tax Legislation
Income Tax Update
Tools You Need to Use Between Now and December 31, 2011
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
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
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
Farmers & Ranchers
Opportunities:
• Cash Basis Accounting• 5 Year NOL Carryback• Farmer Income Averaging• Estimated Tax Requirements/Flexibility
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)
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%
ESTATE TAXES
ARE YOU READY?
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.
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
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
Estate Planning- Questions to Ponder -
•What is the Estimated Value of Your Estate?
What is the Value of Your Estate?
Estate Planning- Questions to Ponder -
•How Much Could Your Estate Owe if You Do Nothing?
How Much Could the IRS Collect if You Do Nothing? (Prior to 12/31/12)
695469695470141083510032011Your emaiSubscribe
How Much Could the IRS Collect if You Do Nothing? (Post 12/31/12)
695469695470141083510032011Your emaiSubscribe
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?
LEGISLATIVE FOCUS
MOVING FORWARD….
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
2011 Beef Financial Management Conference
Thank You
Rob Gunther, CPAFrost, PLLC
[email protected](800) 766-9241
Direct: (501) 975-0112