PATR reporting, a letter was sent to patrons to properly notify them that the grain payments were being treated as per-unit retain allocations.
Will AgVantage FS issue a 1099-PATR forms for the 2010 year? Yes. By the end of 2010 AgVantage FS will assemble all of the necessary data to begin properly reporting the information of form 1099-PATR. In order to accurately report these gross grain payments AgVantage FS will require a form W-9 from each patron to be on file. A copy of this form was sent along with the letter you received. If you need additional forms please visit http://www.irs.gov/pub/irs-pdf/fw9.pdf . Return the completed form to Steve Nitcher, our Grain Business Unit Manager, at our Waverly office.
The per-unit retains reported to me do not agree with the check payments I received. Why? Your net grain checks from AgVantage FS will probably not agree with the reported PUR. Your aggregate amount of bushels delivered times the price and less discounts (moisture, test weight, foreign material, etc.) should be reported as PUR’s. Deductions from payments for services such as storage, drying, trucking, etc. are excluded from the PUR calcululation. Check-off deductions are also excluded in the PUR calculation.
Is AgVantage FS taking this deduction away from producers? No, recent IRS rulings caused the change. Further, as previously mentioned the deduction is
limited by wages paid. Since most producers would not have wages that would qualify under these rules, no tax deduction was available anyway. However, farmer cooperatives have the ability pass-through their deduction to their members. Further, pass-through deductions from a cooperative are not subject to the wage limitation and can be used to reduce taxable income.
I still have questions. Who should I talk with at AgVantage FS?
If you have additional questions, please contact Steve Nitcher, our Grain Business Unit Manager, at our Waverly office at 319-483-4900.