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Tax Loss Farming

Author

Listed:
  • Carlin, Thomas A.
  • Woods, W. Fred

Abstract

About 43 percent of the 2.9 million individuals filing U.S. farm income tax returns in 1970 reported a farm loss. Forty percent of total farm losses were reported by individuals with less than $5,000 in basic income and about 17 percent were reported by those with $25,000 or more. Generally, farm losses became more frequent as basic income rose. Over 90 percent of 1970 farm loss returns had a loss of less than $5,000. Losses of $10,000 or more were reported by about 3 percent. These larger losses were concentrated in two basic income classes--those with negative basic incomes and those with $25,000 or more. Nonfarm income was substantially higher for the farm loss group than for the group reporting farm profits. As expected, farm losses became more important in offsetting nonfarm income as farm size increased. Directly limiting the amount of farm loss that could be used to offset nonfarm income to $10,000 would have affected 3.3 percent of 1970 farm loss returns. With a $20,000 limitation, 1.2 percent of the farm loss returns would have increased tax liabilities. A $30,000 limitation would have affected 0.6 percent of the returns.

Suggested Citation

  • Carlin, Thomas A. & Woods, W. Fred, 1974. "Tax Loss Farming," Miscellaneous Publications 324837, United States Department of Agriculture, Economic Research Service.
  • Handle: RePEc:ags:uersmp:324837
    DOI: 10.22004/ag.econ.324837
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    References listed on IDEAS

    as
    1. Carlin, Thomas A., 1973. "Economic Position of Farm Families When Money Income and Net Worth Are Combined," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 25(3), pages 1-11, July.
    2. Harrison, Virden L., 1973. "Accounting Methods Allowed Farmers: Tax Incentives and Consequences," Miscellaneous Publications 324158, United States Department of Agriculture, Economic Research Service.
    3. Foote, Richard J., 1970. "Concepts Involved in Defining and Identifying Farms," Miscellaneous Publications 322818, United States Department of Agriculture, Economic Research Service.
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    Citations

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    Cited by:

    1. Woods, W. Fred & Sisson, Charles A., 1975. "The Significance Of Capital Gains To Farmers And Some Effects Of Eliminating Their Preferred Income Tax Treatment," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 7(1), pages 1-7, July.
    2. Bell, Bonita, 1975. "Economics of Agriculture: Reports and Publications Issued or Sponsored by USDA's Economic Research Service, July 1973-June 1974," Miscellaneous Publications 321806, United States Department of Agriculture, Economic Research Service.
    3. Baker, C.B. & Barry, Peter J. & Lee, Warren F. & Olson, Carl E. & Hochman, Eithan & Rausser, Gordon S. & Kottke, Marvin W., 1977. "Economic Growth of the Agricultural Firm," Western Region Archives 260636, Western Region - Western Extension Directors Association (WEDA).
    4. Volding, Gerald Thomas, 1976. "An economic evaluation of the cash and accural accounting systems for farmers," ISU General Staff Papers 1976010108000018152, Iowa State University, Department of Economics.
    5. Goss, Kevin F. & Rodefeld, Richard D. & Buttel, Frederick H., 1979. "The Political Economy of Class Structure in U.S. Agriculture: A Theoretical Outline," AE & RS Research Reports 257688, Pennsylvania State University, Department of Agricultural Economics and Rural Sociology.
    6. Reinsel, Edward I., 1986. "FEDERAL FARM INCOME TAXES Is Treasury The Loser?," 1986 Annual Meeting, July 27-30, Reno, Nevada 278116, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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