Accounting Methods Allowed Farmers: Tax Incentives and Consequences

Virden L. Harrison

No 324158, Miscellaneous Publications from United States Department of Agriculture, Economic Research Service

Abstract: Farmers are allowed to choose between the cash and accrual methods of accounting in reporting income for income tax purposes. In 1969, about 98 percent of farmers used the cash method. However, persons with large nonfarm incomes investing in farm enterprises have used cash accounting to show artificial farm losses for tax purposes. This practice has raised the possibility that the cash accounting option may be restricted or even revoked in the years ahead. This publication discusses the current use of cash and accrual accounting, and the advantages of each. Accounting under the accrual system is explained and inherent difficulties are discussed.

Keywords: Agribusiness; Agricultural Finance; Financial Economics (search for similar items in EconPapers)
Pages: 27
Date: 1973-01
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ageconsearch.umn.edu/record/324158/files/ERS-505.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:uersmp:324158

DOI: 10.22004/ag.econ.324158

Access Statistics for this paper

More papers in Miscellaneous Publications from United States Department of Agriculture, Economic Research Service Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().