Livestock – Depreciate? Inventory? Sell?

(Terjemahan di bawah)

Depreciate vs. Inventory

Advertisement
Livestock held primarily for sale by for-profit farmers must be included in inventory.
However, livestock held for draft, breeding, or dairy purposes can either be included in
inventory or depreciated as the farmer chooses. Both options have advantages and
disadvantages, so the decision is ultimately based on whether farmers prefer a current
benefit or future benefit.
 
If farmers choose to depreciate the livestock, they will receive a current depreciation
deduction. However, this will decrease the farmer's basis in the livestock and therefore
increase any gain when the livestock is sold.
 
Also, any future gain on a sale up to the amount of depreciation taken will be taxed at
ordinary rates. If, on the other hand, farmers choose to inventory the livestock, they will
forego the current depreciation deduction but any future capital gain will be taxed at the
lower and more preferable capital gain rates. 
 
Farmers should consider this decision and its impacts carefully, because once a method is
chosen, it cannot be changed unless authorized by the Commissioner. 
 
Depreciation Methods
 
If farmers decide to depreciate their livestock, depreciation will begin when the livestock
is mature (i.e., can be worked, milked, or bred). Most farm business assets are
depreciated using the Modified Accelerated Cost Recovery System (MACRS) which
consists of two depreciation systems: the General Depreciation System (GDS) and the
Alternative Depreciation System (ADS).
 
Generally, GDS must be used unless ADS is required by law or elected. The recovery
period for cattle, goats, and sheep under the GDS method is five years, while the recovery
period for hogs is three years. These recovery periods remain the same under the ADS
method except for cattle, which increases to a seven-year recovery period.
 
All livestock are considered to be tangible personal property and are therefore eligible for
a depreciation deduction under Section 179. They are also considered qualified property
for purposes of claiming the 50 percent bonus depreciation allowance if placed in service
before January 1, 2013. However, if the ADS method of depreciation is used, bonus
depreciation allowance is not permitted.
 
It is important to note that farmers can deduct the costs of raising livestock during the
years in which the animals are being raised. If these costs are deducted, the basis of the
livestock is zero and, therefore, these costs cannot be depreciated. 
 
Inventory Methods
 
If a lower tax rate on a future capital gain is preferred by farmers, they should chose to
inventory their livestock. There are two inventory methods available.
 
The simplest method is called the farm-price method. This method provides for the
valuation of inventories at market price less direct cost of disposition.
 
The other inventory method available is the unit-livestock-price method. To determine
the valuation under this method, livestock are classified into groups with respect to age
and kind. Then, a price for each class is established, taking into account the normal cost
of raising those animals. Farmers using the unit-livestock-price method must reevaluate
unit prices each year and adjust either upward or downward to reflect changes in the costs
of raising livestock.
 
Treatment and Calculation of Gain on Sale
 
Sales of livestock are reported on Form 4797, Sales of Business Property. Calculation of
the gain depends on whether the animals were raised by the farmer or purchased.
 
The gain on livestock raised by the farmer is calculated as the difference between the
selling expenses and the gross sales price, assuming the basis is zero because the costs of
raising the livestock were deducted during the years in which the animal was being
raised.
 
The gain on livestock purchased by the farmer is calculated by subtracting the adjusted
basis and selling expenses from the gross sales price.
 
Treatment of the gain depends on whether or not the property is qualified under Section
1231. As stated in Section 1231(b)(3), to qualify as property used in trade or business,
livestock must be held by the taxpayer for draft, breeding, dairy, or sporting purposes for
at least twelve months (twenty-four for cattle). Any livestock that is held primarily for
sale to customers in the ordinary course of business does not qualify. 
 
If the Section 1231 holding period is not met, any gain or loss from the sale is reported on
Part II of Form 4797, Ordinary Gains and Losses. If the holding period is met, the gain or
loss is reported on Part I or Part III, depending on if there is recapture of depreciation.
 
There are many different methods available to account for livestock, and it is important
that farmers be knowledgeable of their options. The decision of whether to depreciate or
inventory their livestock must be made at the beginning of the farming operation and
cannot be changed without permission of the Commissioner. These various options make
it imperative that farmers utilize the tax planning services a tax professional can provide.
TerjemahanMatikan terjemahan instan

Ternak - depresiasi? Inventaris? Menjual?

(Terjemahan di Bawah)
Terdepresiasi vs Inventaris
Iklan
Ternak dimiliki terutama untuk dijual oleh nirlaba petani harus disertakan dalam
persediaan. Namun, ternak diadakan untuk tujuan rancangan, peternakan, atau susu baik
dapat dimasukkan dalam persediaan atau disusutkan sebagai petani memilih. Kedua
pilihan memiliki kelebihan dan kekurangan, sehingga keputusan pada akhirnya
didasarkan pada apakah petani lebih memilih manfaat saat ini atau manfaat di masa
depan.
 
Jika petani memilih untuk terdepresiasi ternak, mereka akan menerima pemotongan
depresiasi saat ini. Namun, hal ini akan menurunkan secara petani ternak dan karena itu
meningkatkan keuntungan apapun ketika ternak dijual.
 
Juga, laba masa depan pada penjualan sampai dengan jumlah penyusutan yang diambil
akan dikenakan pajak pada tingkat biasa. Jika, di sisi lain, petani memilih untuk
persediaan ternak, mereka akan mengorbankan pemotongan depresiasi saat ini tetapi
setiap keuntungan modal di masa depan akan dikenakan pajak pada tingkat capital gain
yang lebih rendah dan lebih disukai.
 
Petani harus mempertimbangkan keputusan ini dan dampaknya hati-hati, karena sekali
metode yang dipilih, itu tidak dapat diubah kecuali diizinkan oleh Komisaris.
 
Metode penyusutan
 
Jika petani memutuskan untuk terdepresiasi ternak mereka, penyusutan akan dimulai
ketika ternak matang (yaitu, dapat bekerja, diperah, atau dibesarkan). Sebagian besar aset
bisnis pertanian disusutkan dengan menggunakan Modified Accelerated Cost Recovery
System (MACRS) yang terdiri dari dua sistem penyusutan: Umum Penyusutan System
(GDS) dan Penyusutan Alternatif System (ADS).
 
Umumnya, GDS harus digunakan kecuali ADS diwajibkan oleh hukum atau dipilih.
Periode pemulihan untuk sapi, kambing, dan domba dengan metode GDS adalah lima
tahun, sedangkan periode pemulihan untuk babi adalah tiga tahun. periode pemulihan ini
tetap sama dengan metode ADS kecuali untuk ternak, yang meningkatkan untuk periode
pemulihan tujuh tahun.
 
Semua ternak dianggap milik pribadi yang nyata dan karena itu memenuhi syarat untuk
pengurangan depresiasi berdasarkan Pasal 179. Mereka juga dianggap properti yang
berkualitas untuk tujuan mengklaim 50 persen penyisihan penyusutan bonus jika
ditempatkan di layanan sebelum 1 Januari 2013. Namun, jika metode ADS penyusutan
yang digunakan, penyusutan bonus tunjangan tidak diizinkan.
 
Penting untuk dicatat bahwa petani bisa mengurangi biaya membesarkan ternak selama
tahun di mana binatang dibesarkan. Jika biaya ini dikurangi, dasar ternak adalah nol dan,
karena itu, biaya ini tidak dapat disusutkan.
 
Metode persediaan
 
Jika tingkat pajak yang lebih rendah pada keuntungan modal masa depan lebih disukai
oleh petani, mereka harus memilih untuk persediaan ternak mereka. Ada dua metode
persediaan yang tersedia.
 
Metode yang paling sederhana disebut metode pertanian-harga. Metode ini memberikan
untuk penilaian persediaan pada harga pasar dikurangi biaya langsung disposisi.
 
Metode persediaan lain yang tersedia adalah metode unit ternak-harga. Untuk
menentukan penilaian di bawah metode ini, ternak diklasifikasikan ke dalam kelompok
sehubungan dengan usia dan jenis. Kemudian, harga untuk masing-masing kelas
didirikan, dengan mempertimbangkan biaya normal membesarkan hewan-hewan. Petani
menggunakan metode unit-ternak-harga harus mengevaluasi kembali harga satuan setiap
tahun dan menyesuaikan baik ke atas atau ke bawah untuk mencerminkan perubahan
dalam biaya membesarkan ternak.
 
Pengobatan dan Perhitungan Laba Penjualan
 
Penjualan ternak dilaporkan pada Formulir 4797, penjualan Properti Bisnis. Perhitungan
keuntungan tergantung pada apakah hewan dibesarkan oleh petani atau dibeli.
 
Keuntungan pada ternak yang diangkat oleh petani dihitung sebagai perbedaan antara
biaya penjualan dan harga penjualan kotor, dengan asumsi dasar adalah nol karena biaya
membesarkan ternak yang dipotong selama tahun di mana binatang itu dibesarkan.
 
Keuntungan pada ternak yang dibeli oleh petani dihitung dengan mengurangkan dasar
disesuaikan dan biaya penjualan dari harga penjualan kotor.
 
Pengobatan gain tergantung pada apakah atau tidak properti memenuhi syarat di bawah
Bagian 1231. Sebagaimana dinyatakan dalam Bagian 1231 (b) (3), untuk memenuhi
syarat sebagai properti yang digunakan dalam perdagangan atau bisnis, ternak harus
dipegang oleh wajib pajak untuk rancangan, pembibitan , tujuan susu, atau olahraga
setidaknya dua belas bulan (dua puluh empat untuk ternak). Setiap ternak yang dimiliki
terutama untuk dijual kepada pelanggan dalam kegiatan usaha tidak memenuhi syarat.
 
Jika holding period Bagian 1231 tidak terpenuhi, setiap keuntungan atau kerugian dari
penjualan dilaporkan pada Bagian II dari Formulir 4797, Keuntungan Biasa dan
Kerugian. Jika periode holding terpenuhi, keuntungan atau kerugian yang dilaporkan
pada Bagian I atau Bagian III, tergantung pada apakah ada merebut kembali penyusutan.
 
Ada banyak metode yang berbeda tersedia untuk memperhitungkan ternak, dan penting
bahwa petani memiliki pengetahuan tentang pilihan mereka. Keputusan apakah akan
terdepresiasi atau persediaan ternak mereka harus dilakukan pada awal operasi pertanian
dan tidak dapat diubah tanpa izin dari Komisaris. Berbagai pilihan membuatnya penting
bahwa petani memanfaatkan jasa perencanaan pajak profesional pajak dapat memberikan.
Google Terjemahan untuk Bisnis:Perangkat PenerjemahPenerjemah Situs WebPeluang
Pasar Global
Tentang Google TerjemahanKomunitasSeluler
Tentang GooglePrivasi & PersyaratanBantuanKirim masukan
Procedures for Accounting for Livestock
Purchases

All stock purchases are charged to the Centre/Project funding the purchase and to the
appropriate asset account. The livestock asset accounts are as follows:

 0746: Beef Cattle - This year

 0747: Deer - This year
 0748: Sheep - This year
 0749: Horses - This year
 0752: Reptiles - This year

E.g. 20711-01041-0749-99-31-00 for horse purchases.

Sales
School

All livestock sales are to be recorded on a Sale of Livestock Form (XLS, 33.5 KB)

(opens in new window) .

Proceeds from each sale are coded to the appropriate Centre/Project and to account 0263
- Proceeds on Sale of Livestock Clearing Account.

E.g. 20711-01041-0263-99-31-00 for horse sales.

The proceeds are then receipted by the Finance Office.

Finance Office

The Accounts Receivable Assistant will receipt the proceeds into one stop to the
appropriate account as per the  Sale of Livestock Form.

The Accounts Receivable Assistant will note the one stop receipt number on the form and
forward completed form to the Financial Accountant.

Financial Accountant

On receipt of the Sale of Livestock Form, the Financial Accountant:

 Verifies the proceeds have been posted to the Proceeds of Livestock Clearing Account
(0263).
 Verifies the market value against the prior year-end stock valuation.
  Processes a journal to recognise the sale, cost of goods sold and elimination of asset as
follows:

Debit/Credit Account Description Amount

Debit Proceeds from Livestock Total proceeds of sale

0263
Clearing Account

Credit 3024 Beef Cattle Sales Total proceeds of sale

3025 Calf Sales

3026 Cull Cow Sales

3028 Horse Sales

3030 Sheep Sales

3032 Deer Sales

Credit 0741 Beef Cattle - Previous year Average asset value of livestock as at
previous year-end stocktake
0742 Deer - Previous year

0743 Sheep - Previous year

0744 Horses - Previous year

Debit Revaluation Reserve - Beef Average reserve value of livestock as at

1418
Cattle previous year-end stocktake

1419 Revaluation - Reserve Deer

1420 Revaluation - Reserve Sheep

1421 Revaluation - Reserve Horses

Cost of goods sold - Difference between average asset value

Debit/Credit 7604
Livestock and average reserve value

Each month the Financial Accountant reconciles the Proceeds of Livestock Clearing
Account (0263) to ensure all University Sale of Livestock Forms have been processed.
Births and deaths

The School is to complete a Livestock Births and Deaths Form (XLS, 53.5 KB) (opens in
new window) in the event of any natural increase or death of livestock. The completed
form is to be forwarded to the Financial Accountant to process a journal to recognise the
natural increase or death.

In the event of a natural increase

The journal is as follows:

Debit/Credit Account Description Amount

Debit 0746 Beef Cattle - This year Market valuation as advised by School

0747 Deer - This year

0748 Sheep - This year

0749 Horses - This year

0752 Reptiles - This year

Credit 2768 Contribution of assets

In the event of a death

If livestock was born or purchased in current year, the journal is as follows:

Debit/Credit Account Description Amount

Cost of good sold - Market valuation as advised by School or

Debit 7604
Livestock cost

Credit 0746 Beef Cattle - This year

0747 Deer - This year

0748 Sheep - This year

0749 Horses - This year

0752 Reptiles - This year

If livestock was held at 31 December in the prior year, the journal is as follows:
Debit/Credit Account Description Amount

Debit Revaluation reserve - Average reserve value of livestock as at

1418
Beef Cattle previous year-end stocktake

Revaluation - Reserve
1419
Deer

Revaluation - Reserve
1420
Sheep

Revaluation - Reserve
1421
Horses

Revaluation - Reserve
1421
Reptiles

Credit Beef Cattle - Previous Average asset value of livestock as at previous

0741
year year-end stocktake

0742 Deer - Previous year

0743 Sheep - Previous year

0744 Horses - Previous year

0751 Reptiles - Previous year

Cost of goods sold - Difference between average asset value and

7604
Livestock average reserve value

School

The school completes a Livestock Holding Certificate (XLS, 111 KB) (opens in new
window) for each category of stock as at the 31st December each year. These are
forwarded to the Financial Accountant, by the end of the first week in January.

Finance Office

The Financial Accountant processes a journal for each category of livestock to recognise
the livestock valuation adjustments as follows:

Livestock Debit/Credit Account Description Amount

Market value Debit Beef Cattle - Market valuation as advised by

0741
greater than Previous year School less sum of "This Year" and
assets holdings "Previous Year" asset accounts
0742 Deer - Previous
Livestock Debit/Credit Account Description Amount

year

Sheep - Previous
0743
year

Horses - Previous
0744
year

Reptiles -
0751
Previous year

Credit Revaluation Market valuation as advised by

1418 Reserve - Beef School less sum of "This Year" and
Cattle "Previous Year" asset accounts

Revaluation
1419
Reserve - Deer

Revaluation
1420
Reserve - Sheep

Revaluation
1421
Reserve - Horses

Revaluation
1422
Reserve - Reptiles

OR

Livestock Debit/Credit Account Description Amount

Market value less Debit Revaluation Sum of "This Year" and

than assets 1418 Reserve - Beef "Previous Year" asset accounts
holdings Cattle less market valuation

Revaluation
1419
Reserve - Deer

Revaluation
1420
Reserve - Sheep

1421 Revaluation
Livestock Debit/Credit Account Description Amount

Reserve - Horses

Revaluation
1422
Reserve - Reptiles

Credit Beef Cattle - Sum of "this Year" and

0741
Previous year "Previous Year" asset accounts
less market valuation
Deer - Previous
0742
year

Sheep - Previous
0743
year

Horses - Previous
0744
year

Reptiles - Previous
0751
year

Financial Accountant to ensure asset balances in the ledger agree to the Livestock
Holding Certificate balances following posting of adjustments.