https://northarvestbean.org/wp-content/uploads/northarvest-bean-logo.png 0 0 Red River Farm Network https://northarvestbean.org/wp-content/uploads/northarvest-bean-logo.png Red River Farm Network2020-12-31 21:25:332021-01-01 21:30:20Tax Break Available for Beginning Farmers
Tax Break Available for Beginning Farmers
The Minnesota Department of Agriculture’s (MDA) Rural Finance Authority is now accepting applications for a tax credit for the sale or lease of land, equipment, machinery, and livestock in Minnesota by beginning farmers.
To qualify, the applicant must be a Minnesota resident with the desire to start farming or who began farming in Minnesota within the past ten years, provide positive projected earnings statements, have a net worth less than $851,000, and enroll in, or have completed an approved financial management program.
The farmer cannot be directly related by blood or marriage to the person from whom he or she is buying or renting assets. The farmer must provide the majority of the labor and management of the farm.
The tax credit for the sale or lease of assets can then be applied to the Minnesota income taxes of the owner of the agricultural land or other assets.
Three levels of credits are available:
- 5% of the lesser of the sale price or fair market value of the agricultural asset up to a maximum of $32,000
- 10% of the gross rental income of each of the first, second and third years of a rental agreement, up to a maximum of $7,000 per year
- 15% of the cash equivalent of the gross rental income in each of the first, second or third year of a share rent agreement, up to a maximum of $10,000 per year
The Beginning Farmer Tax Credit is available on a first-come, first-served basis. Applications must be received by October 1, 2021.
Interested farmers should note that they can also apply for a separate tax credit to offset the cost of a financial management program up to a maximum of $1,500 per year – for up to three years.