Farmland investors must now pay tax on CRP payments
WASHINGTON, D.C. - New tax hassles are brewing for Nebraskans in the Conservation Reserve Program. The U-S Tax Court has ruled CRP payments don't equate to cash rent, which means self-employment taxes must be paid on that income. Roger McEowen, director of the Center for Ag Law and Taxation, says the ruling has huge consequences for farmland investors and retired farmers who don't collect Social Security benefits, because they're now liable for taxes on C-R-P. McEowen says the ruling means the government will pay out more in C-R-P payments and then collect it back with the self-employment tax. McEowen says it may take up to $35,000 just to appeal the tax ruling to the 8th Circuit Court of Appeals. He says it'll likely take a coalition of ag groups, conservation groups and lenders banding together to raise the funds to make the appeal.