By Chris Clayton
DTN Ag Policy Editor
CHARLOTTE, N.C. (DTN) — Leaders of the National Council of Farmer Cooperatives are optimistic IRS officials will adjust Section 199A(g) tax breaks after testimony this week from Treasury Secretary Steve Mnuchin.
Farmer cooperatives have been trying for more than two years to reestablish a tax deduction comparable to what they received before the 2017 tax law was passed. Last summer, the Treasury Department proposed rules that limited the Section 199A(g) deductions to patronage income, but the Treasury rule would eliminate cooperatives’ ability to combine ?non-patronage income? as part of the deduction calculation.
The tax complication came out of what was dubbed the ?grain glitch? in early 2018 after it initially appeared the 2017 tax law made it much more lucrative for farmers to sell grain to farmer cooperatives than to private grain companies. Congress fixed the provision, but Treasury has been mired since then, trying to complete a rule to go along with the tax fix.
