Form Frm - Montana Farm And Ranch Risk Management Account Annual Reporting Information - 2011 Page 2
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2Form FRM Instructions
An individual or a family farm corporation who has an
attribuable to agricultural business allocated to
eligible agricultural business may establish a Montana
you based on your distributive share of the income
farm and ranch risk management trust account.
from the entity.
Deposits made into this account can be subtracted
•
Your deduction per year cannot exceed the
from their adjusted gross income. However, the
lesser of 20% of your net income attributable to
amount excludable from adjusted gross income
agricultural business, or $20,000.
depends on the business’ net income and cannot
•
Because deposits may not exceed the deduction
exceed $20,000.
to adjusted gross income allowed for that tax year,
Eligible agricultural businesses are ones that produce
there is no carryover provision.
food, feed, and fiber commodities, and/or raise,
Distributions
grow, or produce any of the following for commercial
purposes: livestock, poultry, bees, biological
•
Any deposits that are distributed within six
control insects, fruits, vegetables, and crops (sod,
months of the date of your deposit are income
ornamental, nursery, horticultural). Eligible agricultural
in the year that you reported the associated
business also refers to silviculture and the raising of
deduction. Depending on the timing of the deposit
domestic animals and wildlife in domestication or a
and related distribution, you may need to file an
captive environment.
amended return to report the distribution.
account Information
•
Your deposits must be distributed within five
years. The amounts not distributed within this
Grantor name and identification number. Provide
timeframe are considered to have been distributed
the legal name and tax identification number of the
on the last day of the fifth year. This distribution is
grantor of the farm and ranch risk management trust.
taxable income, and a penalty equal to 10% of the
If the grantor is a family farm corporation, provide
tax due on this amount should be added to the tax
the name of the corporation as registered with the
on the distribution.
Montana Secretary of State.
•
If at any time within the five-year period you
trustee. Provide the name and address of the
become disqualified because you are not
financial institution designated as trustee.
engaged in an eligible agricultural business, the
account number. Provide the account number
entire balance in the trust account is considered
assigned to the trust by the trustee.
to be distributed and must be included in your
Deposits
adjusted gross income in the tax year you became
disqualified. This distribution should be reported
•
List all deposits and dates of each deposit that
as an addition to federal adjusted gross income on
you made for the specific tax year.
Schedule I of the Montana Form 2.
•
You can make your deposits during the tax year or
Questions? Please call us toll free at (866) 859-2254
within 3½ months after the close of the tax year.
(in Helena, 444-6900).
•
Your deposits per year cannot exceed the
lesser of 20% of your net income attributable to
agricultural business, or $20,000.
Deductions
•
Net income attributable to agricultural business
is the total net farm income that you reported on
your federal Schedule F, net farm rental income
that you reported on your federal Form 4835, or
the gain from the sale of draft, breeding, dairy
or sporting livestock that you reported on your
federal Form 4797.
•
If your deduction is for a family farm corporation,
you may only report the amount of net income
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