Roger McEowen: Pre-paid Expenses


October 24, 2017

NASHVILLE, Tenn (RFD-TV) RFD-TV’s “Market Day Report” hosts a weekly interview with Roger McEowen, Professor of Agricultural Law and Taxation at the Washburn University School of Law, and an affiliate with the Kansas Farm Bureau.

The topic of this week’s interview: For business and tax reasons, many farmers and ranchers pre-pay expenses associated with the farming or ranching business. But, to get the deduction for the pre-paid expenses in the year of the payment, the transaction must be structured properly.

So, what are the basic rules to keep in mind with regard to pre-paid expenses? What rules does the IRS apply in determining whether pre-purchased items are deductible? What about the material distortion of income? Are there limitations, and, if so, are there any exceptions to those limitations?

Professor McEowen gives his answers to these and other questions in the video above, and further information on this and many other topics are available on his blog.