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Tax accounting methods of aquacultural producers
Author(s) -
Watters Michael P.,
Daughtrey Zoel W.
Publication year - 1991
Publication title -
agribusiness
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.57
H-Index - 43
eISSN - 1520-6297
pISSN - 0742-4477
DOI - 10.1002/1520-6297(199101)7:1<39::aid-agr2720070105>3.0.co;2-x
Subject(s) - business , cash , agriculture , income tax , agricultural economics , accounting , finance , natural resource economics , public economics , economics , ecology , biology
Aquacultural producers were surveyed to ascertain the tax accounting methods utilized for federal income tax reporting purposes. Approximately 99% of the producers surveyed use the cash method of reporting and also deduct currently the cost of fingerlings purchased for ultimate resale. Because cash‐method farmers generally must capitalize the cost of purchased inventory until the period of sale, aquacultural producers may not be in compliance with current tax rules. Further, producers have classified aquacultural pond construction costs as (a) a soil and water conservation expense, (b) a single purpose agricultural structure, and (c) a land improvement although only the latter treatment appears safe from attack by the IRS. The theoretical propriety of these and other tax policies is examined.