The Impact of the Grain Glitch Fix on Specified Cooperatives

William D. Terando

Journal of Cooperatives, 2024, vol. 31

Abstract: This study investigates the effect of the “Grain Glitch Fix” on the tax and accounting method choices of Specified Agricultural Cooperatives. While the fix was intended to level the playing field between corporate producers and Specified Coops, its modifications also created planning opportunities for both Specified Coops and their patrons that had the potential to expand each eligible patron’s Qualified Business Interest Deduction by as much as 29% or reduce it to as little as 11% of their business income. This study focuses on two such opportunities: a Specified Coop’s decision to retain or pass-down its IRC §199A(g) deduction to eligible patrons and its choice to adopt (or not adopt) the pooling method of accounting to increase their IRC §199A(g) deduction amount. The results and conclusions of this paper contribute to existing literature on the Grain Glitch Fix by showing the differential impact of a Specified Coop’s tax rule and accounting method choices on its retention and distribution levels vary depending on the Specified Coop choice and patron being considered.

Keywords: Agribusiness (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:ags:jlcoop:348502

DOI: 10.22004/ag.econ.348502

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