Registration for the June 27th Partnership Tax Seminar (8:30 AM start time) can be found here: https://cvent.me/olozby

We want to thank New York State representatives again this year for joining the program. 2023 Tax Updates and Department Messages.10.23.23

Norm, Joe and I are looking forward to a great fall season!

Joseph Baldwin, E.A.

Joe Baldwin is the Director of Training for Farm Credit East, ACA.  In addition to training the next generation of farm tax advisors,  Joe has worked for over 15 years with some of the most complex tax situations arising throughout Northeast Agriculture.  He holds a bachelor’s degree in Economics from Bucknell University, a Master’s degree in Business Administration from UMASS, and a Master’s degree in Taxation from Northeastern University. In addition to his involvement with the Farm Credit internal training program, Joe has also lectured through the Cornell Income Tax Conferences, the Farm Financial Standards Council, and the NY Society of Enrolled Agents.

Dario Arezzo, J.D., LL.M, CFP®

Dario Arezzo is the Director of the Cornell Tax Conferences. He specializes in tax consulting, research, planning and compliance for both individuals and businesses. Dario has a quarterly column titled Arezzo on Agriculture published in the prominent national tax publication State Tax Notes. Dario also authors the Cornell Income Tax Conferences’ New York State tax manual. Dario holds a B.S. from Cornell University, J.D. from Albany Law School and a LL.M from New York University.

Norm Provvidenza, CPA

Norm Provvidenza is a Tax Director with CBIZ. As one of the nation’s largest brokers of employee benefits and property and casualty insurance, and one of the largest accounting and valuation companies in the United States, the Company’s services are provided through nearly 100 Company offices in 32 states. He has over 30 years of tax and attest experience working with owners and management of closely held businesses. His expertise is in many industries including construction, manufacturing, agribusiness, real estate, retail and medical professionals. Norm has been instructing at the Cornell Tax Conferences for over a decade.

To register for the fall programs, please use the following link:

https://cvent.me/dEvxYB

Below are the topics that will be presented at this fall’s Cornell Tax Conferences. We look forward to seeing you!

Ethics.

This chapter discusses important issues that help tax practitioners comply with their ethical obligations. Topics include the following:

 Ethical considerations when engaging a client

 Ethical challenges in joint representation

 Terminating a client relationship

 Ethical duties in collecting fees and when records can be withheld for nonpayment

 Ten case studies that illustrate real-life ethical scenarios

Trusts and Estates.

This chapter discusses planning strategies using the gift tax annual exclusion. It explains how to make discounted gifts of interests in a family limited partnership, and how to avoid common IRS challenges to those discounted gifts. This chapter reviews basic Medicaid planning and how decanting a trust can preserve Medicaid eligibility or obtain other more favorable benefits. This chapter provides information on how a fiduciary of an estate can eliminate personal liability for the decedent’s unpaid taxes.

Penalties and Defenses.

This chapter discusses individual, business, and preparer penalties. It also explains what defenses can be asserted against those penalties, and available administrative and statutory penalty relief.

Form 4797, Sales of Business Property.

Form 4797, Sales of Business Property reports gains and losses from sales, but it is also the collection point for recognized gains calculated on Form 6252, Installment Sale Income; Form 8824, Like-Kind Exchanges; and casualty and theft gains and losses calculated in Section B—Business and Income-Producing Property of Form 4684, Casualties and Thefts. This chapter reviews the tax reporting for the sale of business assets. It explains how to calculate depreciation recapture and installment sale gain, and how to report these amounts on Form 4797, Sales of Business Property. This chapter also explains the calculation and reporting of recapture under I.R.C. §§ 179 and 280F.

Retirement Tax Issues.

The Setting Every Community Up for Retirement Enhancement 2.0 Act of 2022 (SECURE 2.0), Pub. L. No. 117-328, changed the required beginning date for required minimum distributions from a qualified plan and added several exceptions to the additional tax on early distributions. This chapter discusses the existing rules for required minimum distributions from an IRA or defined contribution plan and the changes enacted by SECURE 2.0. This chapter reviews existing and new rules for early plan distributions and the requirements for hardship distributions. It explains a new option for qualified charitable distributions. Finally, this chapter contains a summary of key provisions in SECURE 2.0.

Individual Tax Issues: Part 1.

This chapter covers several current issues for tax practitioners preparing individual income tax returns, including the following:

 Casualty losses

 Disaster relief

 New guidance on digital assets

 Mortgage interest deduction

Individual Tax Issues: Part 2.

This chapter explains new laws and regulations that are important for individual taxpayer returns. It includes the following:

 Premium tax credit – new regulations

 Clean vehicle credits

 Home energy credits

 Household employee tax reporting

Agriculture and Natural Resource Tax Issues.

This chapter covers emerging topics that affect farmers and ranchers, including the following:

 Logging

 Section 126 cost-share exclusion payments

 New guidance on employee vs. independent contractor characterization

 Farm trade or business

 Farming S corporation and C corporation issues

Business Entity Tax Issues.

This chapter examines issues that pertain to business entities, including adjusting and reporting S corporation debt basis, a comparison of a redemption vs. a sale of a partnership interest, new Schedules K-2 and K-3 reporting, fixing S corporation eligibility errors, and I.R.C. 501(c)(6) business leagues eligibility and taxation.

Business Tax Issues.

This chapter discusses some of the issues that tax practitioners encounter when they prepare returns for clients who operate a business. Topics include the following:

 Correcting a depreciation schedule for changes in use (e.g., short-term to long-term rental)

 Deducting legal fees

 Information returns

 Limitation on business interest

 New developments in business tax credits

IRS Issues.

This chapter covers issues the IRS targets as key issues for practitioners. Topics include the following:

 Tax scams

 Correspondence audits

 Mailing and receive date rules

 When the IRS pays interest

Offers in compromise

 Information return intake system

 Statutes of limitations

Like-Kind Exchange Issues.

This chapter provides a practical look at the mechanics of a likekind exchange, including the following:

 What property qualifies for an exchange

Timing requirements

 Reporting the exchange

 Sale after the exchange

 Using the exclusion from gain on a principal residence following an exchange

New and Expiring Legislation.

This chapter covers recently enacted tax legislation and procedures. It is organized by subject to help participants quickly find topics of interest and includes a table of tax provisions that expired or are set to expire.

Rulings and Cases.

This chapter summarizes selected rulings and cases that were issued from September 2022 through August 2023. It gives participants an update on issues that are being addressed by the IRS and the courts.

Tax Rates and Useful Tables.

This chapter reports the tax rates, deduction limits, credit limits, and income thresholds and limits that change each year.

The Agricultural Tax Issues course is intended to benefit tax professionals who work with agricultural producers. This course will be held virtually on June 21st (8:30 – 12:30) due to the popular demand of those who purchased the materials last fall. This 4CE course will be a pilot run on whether or not to offer the entire course in the future. The session will cover selected topics from the 2022 Agricultural Tax Issues materials, such as:

• The tax treatment of conservation related expenses and payments, including solar payments.
• Christmas trees, fruit and nut trees, and brambles taxation
• Charitable contribution options for producers
• Allocations of purchase price in acquiring farm assets, including deductions for soil fertility
• AGI compliance for FSA programs and PARP/ERP updates
• Tax challenges with H-2A workers

While the focus is on federal topics, the presenters will relay practical information from the field that is pertinent to New York State as the opportunities arise.

All attendees will receive a digital copy of the 2022 Agricultural Tax Issues workbook, which includes additional topics as well as a sample farm tax return. The price of the course will be $175, which includes the digital materials. For those that have already purchased the digital materials in the fall for $50, the cost to attend the program will be discounted by $50 to $125.

In addition to a registration email, registration can be made by emailing taxschools@cornell.edu. Also, https://cvent.me/42yv0g will direct you to the registration.

The speakers for the seminar are listed below:

Jeffrey Fetter

Jeffrey M. Fetter is President of Scolaro Fetter Grizanti & McGough, P.C. and is Chairman of the Business & Tax Practice and Agricultural Services Groups. His practice focuses on business, estate, tax, succession and transactional planning for closely-held and family-owned enterprises throughout New York and Pennsylvania. Legal services Jeff provides his clients include: state, federal and international tax and business transactional planning; estate and long-term care planning; business and succession planning for closely-held and family-owned business enterprises; e-commerce planning; employee and shareholder/principal relations and employee benefits; protection of intellectual property; transactional planning; acquisitions, dispositions, mergers, tax-free reorganization of business entities; entity structuring; contract negotiation, dispute resolution; international contracts and business planning and the dissolutions of business entities.

Jeff is licensed to practice in the State of New York and the Commonwealth of Pennsylvania. Clients Jeff represents are involved in agriculture-related businesses, professional service, e-commerce, manufacturing, communications and retail businesses.

Jeff is a frequent lecturer in the area of business, succession, tax and estate planning. He has authored several articles on business, succession and estate planning for various periodicals.

Joseph Baldwin

Joe Baldwin is the Director of Training for Farm Credit East, ACA. In addition to training the next generation of farm tax advisors, Joe has worked for over 15 years with some of the most complex tax situations arising throughout Northeast Agriculture.  He holds a bachelor’s degree in Economics from Bucknell University, a Master’s degree in Business Administration from UMASS, and a Master’s degree in Taxation from Northeastern University. In addition to his involvement with the Farm Credit internal training program, Joe has also lectured through the Cornell Income Tax School, the Farm Financial Standards Council, and the NY Society of Enrolled Agents.

Dario Arezzo, J.D., LL.M, CFP®

Dario Arezzo is the Director of the Cornell Tax Conferences  where he specializes in tax consulting, research, planning and compliance for both individuals and businesses. Dario has a quarterly column titled Arezzo on Agriculture published in the prominent national tax publication State Tax Notes. Dario also authored the Cornell Income Tax School’s New York State tax manual. Dario holds a B.S. from Cornell University, J.D. from Albany Law School and a LL.M from New York University.

New York State Continuing Education Sponsor License ID# 000663. IRS Sponsor ID 9FRDE.

While not all topics will be presented, the coursebook being offered to attendees for the June 21st online course includes the following topics:

Timely Tax Issues Impacting Agricultural Producers

This chapter reviews hot topics in agricultural taxation, including farm income averaging, the taxation of farm rental property, corporate reorganizations, and retiring a farm asset.

Tax Treatment of Conservation-Related Payments and Expenses

Farmers are exploring many new practices and opportunities related to improving water quality, reducing greenhouse gas emissions, and increasing renewable energy opportunities. This chapter reviews the tax rules for conservation-related expenses and payments, including soil & water quality expenses, cost share programs, CRP payments, conservations easements, carbon credits, pipeline and solar payments, and more.

Retiring a Farm Partner

Retiring a partner under the provisions of I.R.C. § 736 can be a very effective way of transferring ownership of a farm business to the next generation be that family members or key employees. These provisions can be applied at any time that a partnership desires to liquidate the interest of a partner. This approach has several advantages over an outright sale or an installment sale. However, the rules are somewhat complex and present several pitfalls for the unwary. This chapter reviews the rules for a successful business transfer.

CPA or Attorney Statements for AGI Compliance and other FSA Issues 

Farm programs are varied and complex. They each come with their own payment limitations and adjusted gross income compliance rules. This chapter reviews Farm Service Agency rules for CPAs and attorneys to certify compliance with AGI requirements. It also provides updates on several new programs implemented in 2022.

Tax Challenges for H-2A Workers

Employers with H-2A workers must strictly adhere to complex federal regulations, as well as strict IRS procedures for payroll and associated expenses. This chapter reviews common tax issues associated with H-2A workers.

Newly Acquired Farm Assets

Farmers who purchase or otherwise acquire farm property must allocate the purchase price or basis among the various assets. This chapter discusses the assignment of value to farm assets such as drainage tile, fence, and residual fertility. It also reviews key 2022 rules for depreciation and expensing.

Considerations for Starting an Agricultural Business

This chapter discusses how to determine when an agricultural business begins. It also reviews the rules for deducting and amortizing startup costs.

The Taxation of Tree and Berry Farms

This chapter discusses special tax issues associated with Christmas trees, fruit and nut bearing trees, and berries and brambles.

Charitable Gifting for Farmers

Many farmers wish to contribute or donate to charitable organizations. This chapter provides an in-depth review of the rules for the charitable gifting of commodities. It also discusses several other options farmers may consider when planning their charitable giving strategies, including charitable remainder trusts and donor advised funds.

Sale and Exchange of Farm Property

Calculating and reporting gains and losses on the disposition of business assets can be complex. Form 4797, Sales of Business Property, not only reports gains and losses from straightforward sales, but it is also the collection point for recognized gains calculated on Form 6252, Installment Sale Income; Form 8824, Like-Kind Exchanges; and recognized gains and losses calculated in Section B—Business and Income-Producing Property of Form 4684, Casualties and Thefts. This chapter is a reference for reporting tax for the sale and like-kind exchange of farm property.

Sample Farm Tax Return

Thank you to all the 2022 Cornell Tax Conference Attendees!

As a reminder, there is a complimentary 2 CE ethics program on 11/18 at 8:30 AM for all 2022 attendees. Everyone that registered has received a link at this point. If you did not register and would like to, please email taxschools@cornell.edu.

Thank you helping us make 2022 a successful year!

2022’s Cornell Tax Conference included wonderful representatives from New York State.

Attendees can access the PowerPoint by clicking on the link below:

2022 Cornell Tax Conference NYS PowerPoint

As a reminder, all attendees of the 2022 Cornell Tax Conferences will receive digital materials. For those that have already registered, be sure to be on the lookout for an email from “Digital@omnipress.com. This link will allow you to create a login to access your materials. For those that haven’t yet registered, there’s still time to do so!

Digital materials available this year include:

• 2020-2022 Key Numbers
• 2022 New York State Income Tax Workbook
• 2022 National Income Tax Workbook

We’re looking forward to seeing you at this year’s Cornell Tax Conference!