Tax question? Ok on CRP the guy that puts it into the program, if he is on social security he doesn't have to pay social security on it because the land is considered retired. If he is not on SS then the income is considered rent, so must pay fed and ss. My question is if the first guy sold it to another person that's on SS would he be exempt from SS on it or would it be considered as rent since he wasn't the one that retired it and knew going in the amount of income it would be bringing in?

What about buying products from companies that have been subsidized by paying no property tax to build and operate in a community for x years. Or companies get tax credits for employing certain age groups.

Donner , If tax breaks = subsidies , then do you take the standard or any deductions on
your Fed. Income Tax ? Even though you have income from multiple sources ?
Or should your deductions be voided because someone disagrees on one of the ways you made your money ?

Or are you upset that someone "stole your" hunting spot by leasing with a farmer ?
And now that farmer should pay !

For the record , I don't lease any land for hunting , we have 200 acres that anyone who ever asked were allowed ,
I don't like to loose land to leases any more than anyone else , but to punish someone for diversifying doesn't seem right .

You don't pay SS on rental income.

If you read back you will see Coonsbane pointed out the problem with my original premise so I backed away from it.

Someone actually offered to lease some of my land for waterfowl hunting and that is what got me thinking about it.

An example that points out my original premise would be something like this. First time home buyers receive help to make their first home purchase, because they receive that help they cannot just lease out the house and live somewhere else.

Not a perfect example but you see what I am saying and if you read back Coonsbane made the best argument on why I was wrong in my original premise.

SS meaning social security?
Wish that was so!

Were talking CRP here not houses!

We're not talking crp or houses and you appear all sorts of confused.

I thought we was talking fairness of taxes.

Why should a farmer that's not retired have to pay SS on the CRP land he has rented to the government? The main topic that you started was about hunting on CRP land wasn't it, you surely wasn't talking about hunting on a bare field?

Then why should a city dweller rent a house to someone and file a sch E and not pay SS?

Whether there is a advantage to pay more SS for your retirement is a different subject!

Originally Posted by Foxpaw
Tax question? Ok on CRP the guy that puts it into the program, if he is on social security he doesn't have to pay social security on it because the land is considered retired. If he is not on SS then the income is considered rent, so must pay fed and ss. My question is if the first guy sold it to another person that's on SS would he be exempt from SS on it or would it be considered as rent since he wasn't the one that retired it and knew going in the amount of income it would be bringing in?


You don't pay SS on rental income.
There has been a federal court case that establishes that one does indeed pay SS taxes on rent from agriculture land. Now leases on that land that don't pertain to agriculture may be a grey area such as wind turbines, cell phone towers etc. but a rental fee paid to a land owner that has the Ag land defined as agriculture land and may be in preferred tax situations due to that definition legally needs to include the farm rent received as 1040 F income and subject to SS. Lease payments from hunters etc. are leasing land in a defined agriculture situation and thus should be put on 1040 F and not schedule E which is income exempt from SS. We have several farmers in our area that rented goose blinds out or land for goose hunting and that income was placed on the 1040 F. I currently only work with one farmer who is getting lease payments from wildlife lease firm and we put that income on his 1040 F as well as his tower income as the land is designated as Agriculture land and subject to the rules in that definition.
SS income is a federal system or tax so unless states pass particular laws there are not as many exemptions as one may think or like.

Bryce

When your in a boat and its sinking you have to swim, if you can't swim then you best grab a board!
Just wondering what kind of board the OP will grab on to.

You can see the conversation I am engaged in because I am quoting the person I am responding to, you are intermixing different lines of conversation.

The original post and conversation had nothing to do with CRP, that is why you are confused. CRP was interjected later, I am following the original line of conversation and you are in the weeds.

I guess if a person was using his land to raise a crop and was getting subsidized for raising that crop and you could make some extra money by leasing out the same land. Why not, the crop is still being grown and that is what the subsiding is for. JMO

Do farmers own crp acres that is the reduced tax thing you are talking about? I thought the subject matter was the rich farmers ain't paying their share of real tax. If you are hunting on bare farm fields, sounds to me you are the one confused, esp. if you want to raise the property tax on it.
If you remember correctly income tax was injected in to it when it was suggested the rich farmers was taking cash and not claiming it on fed taxes.
Generally farmers don't complain too much about school tax, they understand if you can educate them maybe they won't be standing on a corner selling dope or their self. Education really shows today, don't it?

I hear a few more complaints about real tax for hospitals. They feel building a building for someone else to get rich off of isn't fair. But they also know that with the ridiculous prices (like $12 for an Tylenol) is robbery but that's what Obama Care is for. right?

And maybe I do get in the weeds(oh is this off subject) from time to time. And once I did get snake bit retrieving a puppy for a lady, but I lived.

No, the original post was about reduced property taxes due to state/county programs that give ag land lower property taxes. My original thoughts were that if the state/county is granting tax breaks in order for people to be able to afford to keep the land as farmland then if that land is being used for commercial ventures outside of agriculture they should not get those tax breaks.

CoonsBane pointed out the tax breaks are to keep the land undeveloped

Do farmers own crp acres that is the reduced tax thing you are talking about?
[/quote]

No, the original post was about reduced property taxes due to state/county programs that give ag land lower property taxes. My original thoughts were that if the state/county is granting tax breaks in order for people to be able to afford to keep the land as farmland then if that land is being used for commercial ventures outside of agriculture they should not get those tax breaks.

CoonsBane pointed out the tax breaks are to keep the land undeveloped[/quote]

If you are going to talk fairness of taxes you might want to open up your tunnel vision and understand more about the farming community. If the whole discussion was from the fact you lost your free hunting spot and think someone should pay, then plant your 40 in trees and quit breathing that chicken dust its making you paranoid against your farmer friends.

If you want to hold that cheap taxes on farmland keeps the concrete at bay, then hang on to that board and float to your next ideal. Personally I think if some struggling farmer is offered big bucks for prime development even if he was paying no real tax, he might just take it. I know a deal where a business was 5 mi from town and the city was going to zone in everything from there and in between, but it didn't fly.

And while we are on the subject of hunting leases. I know some that actually want predator trappers, the timing with deer season is not ideal, and/or if a trapper was to lay out a line in a circle it almost impossible without having to cross a lease somewhere. Also many of the them allow kids to hunt does after buck season or anybody that want them to eat for that matter, for free.

Anyway taxes ain't gone up yet any more than usual and what ever reason you or I need to get thru to the next hurdle then hold to it. Discussion is good and often shows me new stuff about my self, and no harm done that I can see. And by the way our hens started laying 3 eggs a day last Sunday. We're in the money now, lol. I told them not to work on Sunday, but they are just chickens, lol.

This makes my head hurt.

Man o Man what a post!!!!!! I will chime in here just to show what some states (and Uncle Sam) do. Ag land here is VALUED for tax purposes by the soil type AND the land use (a combination of the two). Better laying topography and productive cropland use is VALUED higher than the hilly pasture or sandy soil cropland use. Irrigated cropland is VALUED higher too. Real estate property taxes (in NE) are based on that value and currently the tax basis is less than the ASSESSED VALUE (somewhere in the 80% of assessed value range). Not going to go into the mill levy rates as that is an entire post on its own. Now the state (NE) follows the Uncle Sam (CRP) rules that allow for leasing recreational use (TRAP, HUNT, FISH, CAMP etc.,) of that land without any change in the taxed amount..... HOWEVER.......... The Nebraska Recreational Use Act (if you take $1.00 for that REC use) requires liability insurance ABOVE and BEYOND normal agricultural activities if the owner wants to be protected from a court suit involving damages to the USER of this land outside of those ag activities. Break a leg chasing a pheasant, accidental discharge of a firearm, get poked in eye by a tree branch,,,, that kind of stuff and farm insurance will not protect the owner from any lawsuit while someone is "recreating" on that ag land. I worked (for USDA) with CRP since its beginnings and the first question was how is the income (rent check) categorized by the IRS. For years it was considered EARNED INCOME and it affected SS payment and benefits. Then in about 2014 the Fed District Court (don't ask me which one) ruled that CRP payments are exactly like normal farm rent and are considered UNEARNED INCOME and subject to different SS guidelines and incomes. Fortunate or unfortunate I am betting each state has laws to benefit landowners so it can tax them as the lobbying pressure dictates. Get mad at the boys and girls in the state house and not at each other is..........my take...... the mike