COMMODITY EXCHANGE FOR FARM TRUCK

[Marie]

Where do I find the information regarding this?  Looked in the Farm pub, but didn't find.

[Marie]

Farmers buy trucks or pickups with grain or calves sold.  Proceeds go directly to the dealer.  I know I've read different articles on this, but, of course, can't find them now for reference. 

[Lee B]

Iowa State University Center for Agricultural Law and Taxation is an excellent Resource:

https://www.calt.iastate.edu/

[DANRVAN]

3 hours ago, Marie said:

Farmers buy trucks or pickups with grain or calves sold.  Proceeds go directly to the dealer. 

FMV of product is recorded as sales.  There must have been a negotiated price before the deal was closed with the buyer.

That also becomes basis of vehicle.

I have not seen this before, is the buyer of of calves/grain independent from vehicle dealer?  

[Marie]

 it happens here often.  It saves on sales tax    Farmer sells calves or grain and the money goes direct to the vehicle dealer in exchange for a farm truck. There's paper work for dept of revenue, but it works out there is no sales tax 

[Marie]

I looked on the IOwa state farm website but could not find anything with the search button.  

[Lee B]

Sounds like a variation of a classic barter transaction. Generally, barter transactions are subject to all taxes including sales tax.

Does Missouri specifically exclude this type of transaction from sales tax?

[DANRVAN]

4 hours ago, cbslee said:

barter transaction

That was my first thought, but there are three parties involved.  I have never head of anything like it.  So if farmer wants to buy a $50,000 pickup from Fast Freddy's auto lot, he delivers grain with the exact same value to Riverside Grain Grabber's Inc.  RGG then forwards the money to Fast Freddy.  Seems odd Fast Freddy has no obligation to report for sales tax.

[DANRVAN]

6 hours ago, Marie said:

Farmer sells calves or grain and the money goes direct to the vehicle dealer

Report sales on Schedule F and depreciate same amount as cost of vehicle.