IRC 199 Information and Resources
May 17, 2010
IRC 199 Information and Resources
A special federal income tax provision allows cooperatives to allocate members a tax deduction generated by “qualified production activities.” A recent private letter ruling from the Internal Revenue Service clarified that payments CHS makes to its members for grain and oilseeds are considered qualified distributions by a cooperative. As a result, the deduction available to CHS for production activities has been greatly enhanced.
The CHS Board of Directors has elected to pass through to eligible member-owners this tax deduction generated from the purchase of members’ grain and oilseeds, and deductions related to certain production activities associated with patronage business during our fiscal year ending Aug. 31, 2009. Eligible members received a letter and statement detailing the amount of the deduction for which they are eligible.
CHS encourages members to seek competent tax advice on how this deduction can be claimed for federal and state purposes. Members with questions regarding their allocation of this tax deduction by CHS should call 1-800-328-6539, ext. 6124.
In addition to informational documents provided here, CHS will host a free webinar on May 27 at 9:30 a.m. CDT featuring Dr. Roger McEowen, Center of Agricultural Law and Taxation at Iowa State University, a respected expert in the area of agricultural tax. Viewers will be able to access the live webinar that day from the www.chsinc.com home page or view the archived version from this page after June 1.
We at Northern Plains encourage you to contact your accoutant and/or tax preparer if you are unable to participate in this webinar.
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