Source: FARM DOC DAILY, UNIV. OF ILLINOIS, 5/19/17

Because agriculture producers can use cash accounting for federal and state income tax purposes, there is a recognizable difference between taxable farm income and accrual farm income. These differences can have an immense impact on tax liability, earnings, and net worth not always recognized on farm financial statements. Part of your operations annual business assessment should include calculating the amount of deferred tax liability, in order to be well aware of the possibilities that could be triggered.

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