• Can provide positive projected earnings statements • Is not directly related to the owner of the agricultural asset. This includes parents, grandparents, brothers, sisters, spouses, children, and grandchildren. Legal adoption shall be considered in full effect. • Has a net worth that does not exceed the limit provided under Minn. Stat. § 41B.03, subdivision 3, paragraph (a), clause (2). This limit is $851,000 in 2020. • The beginning farmer may need to participate in an approved financial management program. Costs of financial management programs up to a maximum of $1,500 per year (for up to 3 years) may also be eligible for a tax credit. The financial management credit need not be tied to any agricultural asset sale or rental. Definition of “Agricultural Asset”: Agricultural land, livestock, facilities, buildings and machinery used for farming in Minnesota Credit to the agricultural asset owner: • 5 percent of the lesser of the sale price or fair market value of the agricultural asset up to a maximum of $32,000; • 10 percent of the gross rental income in each of the 1st, 2nd, and 3rd years of the rental agreement, up to a maximum of $7,000 per year, or • 15 percent of the cash equivalent of the gross rental income in each of the 1st, 2nd, and 3rd years of a share rent agreement, up to a maximum of $10,000 per year. The agricultural asset owner can claim credits in one of the above categories in a given tax year on a per-owner basis up to the maximums stated. Role of the Rural Finance Authority (RFA) The RFA will administer the tax credits by: • Certifying beginning farmers • Assisting beginning farmers with locating eligible financial management program options in their area • Certifying that owners of agricultural assets are eligible for the tax credit. This is a first come, first served initiative. The maxim amount available is about $12 million. The asset owner may be an individual, trust, a qualified pass-through entity. The Owner of agricultural assets cannot be an equipment dealer, livestock dealer, or comparable entity engaged in the business of selling agricultural assets for profit.
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