Tax Implications of USDA’s Discrimination Financial Assistance Program

Farmers, ranchers, and forest landowners who experienced discrimination by the USDA in lending prior to 2021 may receive assistance. The IRS has clarified the tax treatment of this assistance. Payments through the program are includible in gross income. Fees paid to an attorney in connection with an action involving unlawful discrimination may be deducted “above-the-line” (no itemizing required), but only to the extent of payment received under the program. Whether the payment is subject to self-employment tax depends on the situation. #IdeaoftheDay

Don’t miss today’s new blog post!