FARM LIFE NEWS
Taxlink by Andy Biebl
Andy Biebl DTN Tax Columnist
Mon Aug 18, 2014 12:31 PM CDT

Hedging, when done properly, is designed to minimize price risk for commodity producers. But while economic risk might be minimized, IRS risk can increase.

The tax law defines a hedge as a transaction in the normal course of business to minimize the risk of price change with respect to inventory or supplies. This requires a producer to have a hedging position that's opposite the physical position on the farm and within normal production ranges. For example, if a producer in the middle of the summer growing season is concerned about a potential decline in the corn price, his physical long ...

Quick View
Related News Stories
Wendy's Shares its Story
Obama Calls for $10 Oil Tax
Woodbury: Farm Family Business
Russ' Vintage Iron
No Recession Repeat
Looking for Two Good Views
Input Costs - 1
Woodbury: Farm Family Business
Ag Policy Outlook
Education on FDA Rules Lacking