Senate bill gives head start for farm tax breaks in 2005.(TAXES)

Kiplinger Agriculture Letter, The, September, 2004

A Senate bill gives a head start for farm tax breaks in 2005. Finance Com. Chm. Chuck Grassley and ranking Democrat Max Baucus, both ag backers, have merged pet tax proposals into a bipartisan bill that includes goodies for farmers and ranchers. It would allow producers to defer federal taxes on up to 20% of annual income by putting the funds in a risk-management savings account.

Taxes would be due upon withdrawal. The measure would also ensure that farmers' use of income averaging wouldn't trigger the alternative minimum tax. And farmers' donations of commodities to hunger relief organizations would be deductible. The Senate should pass a version of this bill sometime next year.