The Minnesota Department of Agriculture’s Rural Finance Authority reminds beginning farmers to apply by Nov. 1, 2018 for the tax credit for the sale or lease of land, equipment, machinery, and livestock.
To qualify, the applicant must be a Minnesota resident with the desire to start farming or began farming within the past ten years, provide projected earnings statements, have a net worth less than $816,800, and enroll in an approved financial management program. The farmer cannot be directly related to the person from which he or she is buying or renting assets. The tax credit for the sale or lease of assets can then be applied to the Minnesota income taxes of the owner of the farm land or agricultural assets.
Three levels of credits are available:
- 5 percent of the lesser of the sale price or fair market value of the agricultural asset up to a maximum of $32,000;
- 10 percent 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 percent 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. www.mda.state.mn.us/bftc
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.