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Consider smaller forward contracts for tax purposes

A farm tax specialist has some advice for farmers forward contracting grain.

Dan Coulthard with Compeer Financial says he recommends doing smaller contracts.

“Because if we are looking at it, we can bring income or tax those smaller incomes back in and don’t have to defer all payments (like you would with) a big contract.”

He tells Brownfield smaller transactions give farmers the ability to maximize certain tax brackets.

“Instead of that one big 10,000 bushel contract for that same price, make it into five 2,000 (bushel contracts) or whatever. So that way they have that flexibility at year-end to utilize what they currently have as assets.”

Coulthard made his comments during a recent Compeer Financial What’s Happening podcast, a content partnership with Brownfield.