Montana Form Frm Draft - 2010 Montana Farm And Ranch Risk Management Account Page 2
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2Form FRM Instructions
An individual or a family farm corporation who has
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If your deduction is for a family farm corporation,
an eligible agricultural business may establish a
the amount of net income that you can attribute to
Montana farm and ranch risk management account.
agricultural business is allocated based on your
The account enables them to exclude deposits made
distributive share of the income from the entity.
into this account up to $20,000 annually from their
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No carryover provisions are allowed. Your
adjusted gross income.
deduction cannot be greater than 20% of your net
To qualify for this deduction, an eligible agricultural
income that is attributed to agricultural business.
business has to be for the production of food,
Distributions
feed and fiber commodities; livestock and poultry;
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Your deposits have to be distributed within five
bees, fruits and vegetables; and sod, ornamental,
years.
nursery, and horticultural crops that are raised,
grown or produced for commercial purposes. Eligible
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Any deposits that are distributed within six
agricultural business also means the raising of
months of the date of your deposit are income
domestic animals and wildlife in domestication or a
in the year that you reported the associated
captive environment along with silviculture.
deduction. Depending on the timing of the deposit
and related distribution, you may need to file an
account Information
amended return to report the distribution.
Grantor name and identification number. Provide
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The amounts that you do not distribute within your
the legal name and identification number of the
five-year period of eligibility are considered to
grantor of the farm and ranch risk management trust
have been distributed on the last day of the fifth
that you created.
year that the deposit is made. This distribution is
trustee. Provide the name and address of your
taxable income and is assessed a penalty of 10%
trustee.
of the tax due on this amount.
account number. Provide the account number
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If at any time within the five-year period you
assigned to the trust.
become disqualified because you are not engaged
Deposits
in an eligible agricultural business, the entire
balance in the trust account is considered to be
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List all deposits and dates of each deposit that
distributed and should be included as part of
you made for the specific tax year.
the current year’s adjusted gross income. This
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You can make your deposits during the tax year or
distribution should be reported as an addition to
within 3½ months after the close of the tax year.
federal adjusted gross income on Schedule I, Line
9 of the Montana Form 2.
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The trustee cannot accept any deposits in excess
of the allowable deduction.
Questions? Please call us toll free at (866) 859-2254
(in Helena, 444-6900).
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The assets of your trust have to be cash or
obligations that adequately state interest and pay
interest at least annually.
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The assets of your trust cannot be commingled
with other property unless they are in a common
trust fund or common investment fund.
Deductions
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Net income that is attributed to agricultural
business refers to the total net farm income that
you reported on your Federal Schedule F or to the
net farm rental income that you reported on your
Federal Schedule 4835, or to the gain from the
sale of draft, breeding, dairy or sporting livestock
that you reported on your Federal Form 4797.
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