Roger McEowen's got a great post on his Agricultural Law and Taxation Blog about the impact the proposed Republican Tax Bill could have on farmers, leasing, and farm entities.
Here's Roger's conclusion:
"The typical farmer that owns land and farms it either as a sole proprietor or as a general partner in a general partnership will see an overall tax decrease. That will be particularly true for these farmers in the high tax brackets. That’s because only 70 percent of the farm income will be subject to self-employment tax. However, a farmer that owns the land and rents it to a separate farming entity will incur more S.E. tax than under present law. If that farmer would be in a tax bracket higher than 25 percent, the benefit of the maximum business rate may fully offset the additional S.E. tax. That’s probably an oversimplification of the impact of H.R. 1. Obviously, each situation is unique and will require its own analysis. And, remember, H.R. 1 is only a proposal. It may never actually become law."
The entire post is well worth a read, because Roger gives a detailed analysis of common farm planning strategies and how the proposed bill would impact those strategies. Check out his article at the Agricultural Law and Taxation Blog.