File their return and pay all tax due by March 1, 2021, OR. If meeting the gross income test, farmers are exempt from a penalty for failing to file estimated taxes if they: Because the two-thirds rule, however, applies to the current taxable year or the preceding taxable year, retiring farmers or those hit by one year of decreased farm income will not suddenly lose their farmer status. The restriction of like-kind exchange deferral of tax treatment to real property may also impact qualification since income derived from the sale of depreciated property is not “farm income” for purposes of this provision. Note: During periods where farm income may be reduced, some clients who have historically qualified as “qualifying farmers” may no longer qualify for the special estimated tax rule. (Source: Internal Revenue Manual Exhibit 20.1.3-4). The following figures illustrate the calculation for determining whether a farmer is a qualifying farmer for purposes of the estimated tax exception for farmers.
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