THE TAX CUTS & JOBS ACT: TAX REFORM, THE UNIFORM CAPITALIZATION RULES & FARMERS
Baker Peterson Franklin will be providing a series of articles regarding the tax reform changes.
The Tax Cuts and Jobs Act has made broad revisions to the tax code and will affect many of the tax treatments for not only income and expenses, but also the items to be capitalized. For those not familiar with the Uniform Capitalization (UNICAP) rules, they provide that direct and certain indirect costs allocable to property used in production by a taxpayer must be capitalized into the basis of the property. For farmers this means for newly planted trees and vines (permanent crops), the cost of the trees, planting costs and the cultural costs required to grow those trees must be capitalized until they produce a marketable crop. More