World Perspectives

Co-Op Tax Deduction Fix Coming

Gary Blumenthal and Bob Kohlmeyer both discussed the history of co-ops and the changes in their tax treatment under the recent tax reform bill this week. Following is a summary of the previous provision; the change made by the tax reform bill; how the implementation process might unfold; and the outlook on how the new co-op deduction might be revised. First, the old co-op tax provision (see Ag Perspectives, 3 November), known as the Section 199 provision, is highly prized by farmer cooperatives with manufacturing operations. It was established in 2004 and provided a 9 percent deduction (phased in over the years from 3 percent and then 6 percent). The deduction is calculated on the lesser of taxable income or gross receipts from manufacturi...

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From WPI Consulting

Weighing in on strategic realignment

WPI’s team was retained by the governing board of a U.S. industry organization to review a decision, reached by vote, to invest significant assets into the development and management of an export trading company. WPI’s team conducted a formal review of this decision and concluded that the current level of market saturation would limit the benefits of the investment. Based on WPI’s analysis and recommended actions, the board subsequently reversed its decision and undertook a strategic planning effort to identify more impactful investments. On behalf of numerous clients, WPI has not only assisted in identifying strategic paths but also advised their implementation.

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