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n. Illinois | tax returns are cash basis on 99% of the farming operations and as such do not ever reflect the reality of the that year. You would think an accountant would understand that but that is giving them too much credit. Tax returns ignore inventory changes, Account Receivable and Accounts payable changes, They ignore changes in Pre Paid Expenses. Anyone using Schedule F to determine true earnings of a farming operation should not be in business advising farmers. On cattle feeders it also ignores the fact that you just had to replace that cheap feeder (relative) to a much much more expensive feeder.
Number 1 goal of a tax document is to minimize taxable income not to report true earnings.
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My accountant claims…
