Take Advantage Of AMT Opportunities, Farmers!

Most people in the farm industry know they can sell qualifying farm property as a sole proprietor or partnership and use their lifetime capital gains exemption to avoid paying tax on the sale. However, many are unaware of the fact that there is a second calculation called the Alternative Minimum Tax (AMT).

This provision has been around for roughly 30 years, and it was introduced as a way to bring fairness to our tax system. At that time, there was a perception that high income earners and farmers were paying too little tax because of the deductions available. AMT is a separate calculation that could result in a significant tax bill, but it’s unique in that it’s considered a pre-payment on future tax.