The Minnesota Department of Agriculture’s (MDA) Rural Finance Authority reminds beginning farmers and asset owners to apply by Oct. 1 for the tax credit for the sale or lease of land, equipment, machinery, and livestock.
To qualify, the applicant must be a Minnesota resident with the desire to start farming or who began farming within the past 10 years, provide projected earnings statements, have a net worth less than $836,000, and enroll in or have completed an approved financial management program.
The farmer cannot be directly related to the person from whom he or she is buying or renting assets. The tax credit for the sale or lease of assets can then be applied to the Minnesota income taxes of the owner of the farmland or agricultural assets.
Three levels of credits are available:
Five percent of the sale price or fair market value of the agricultural asset up to $32,000, whichever is less.
10 percent of the gross rental income of each of the first, second and third years of a rental agreement, up to $7,000 per year.
15 percent of the cash equivalent of the gross rental income in each of the first, second and third year of a share rent agreement, up to $10,000 per year.
The Beginning Farmer Tax Credit is available on a first-come, first-served basis.
Interested farmers should note that they can also apply for a separate tax credit to offset the cost of a financial management program up to $1,500 per year for up to three years.