Farm Bill Tax Provisions

Transcription

1 Farm Bill Tax Prvisins 2321 N. Lp Drive, Ste 200 Ames, Iwa June by Rger A. McEwen Overview H.R. 2419, the Fd, Cnservatin and Energy Security Act f 2008, better knwn as the 2008 Farm Bill, was passed by the Huse n May 14, the Senate n May 15, and veted by the President n May 21. On May 21, the Huse verrde the President s vet, and the Senate did the same n May 22. But, the versin f the Farm Bill that was sent t the President and which he veted n May 21 did nt cntain Title III the trade title. Thus, the President did nt vet the entire Bill. While bth the Huse and Senate verrde the President s vet, a Cnstitutinal questin remained as t whether the President s vet and/r the verride vtes had any effect. The Huse passed a substantively identical Farm Bill - H.R n May 22. The Senate passed H.R (with the same title as H.R. 2419) n June 5. H.R repeals H.R in its entirety. This time, hpefully, the entire Bill will be sent t the President fr his signature r vet (r the Bill culd becme law by the President simply nt signing it by June 15). If the President vetes the Bill, the Cngress will have t undertake anther verride vte. At this time, hwever, it lks like the Cngress has the vtes t verride any Presidential vet. While the legislatin is cmprehensive and deals with numerus nn-tax prvisins, this is the first time that a Farm Bill has cntained substantial tax legislatin. In general, the Farm Bill is a net tax increase - it cntains mre revenue-raising ffsets than tax breaks. That feature f the Bill was ne factr in why the President veted the Bill. The article belw prvides a detailed discussin f the Farm Bill tax prvisins, but fr thse readers lking fr a quick heads-up n the tax 1 prvisins, that is prvided first. Nte n Effective Date: H.R states that it is effective upn the earlier f enactment r the date f enactment f H.R While that generally leads ne t the cnclusin that May 22 will be the effective date f the Farm Bill prvisins that are "effective upn enactment" r "effective fr tax years beginning after date f enactment", that may nt be crrect. There still remains uncertainty as t the effective date f H.R Because H.R as veted by the President was nt the Bill that Cngress passed (and n which the Cngress subsequently vted t verride the President's vet) a questin is raised as t whether H.R was ever enacted. Cngress culd have easily avided this cnfusin by prviding a specific date fr the date f enactment f H.R such as May 22. That way, there wuldn't be any disadvantage t smene wh takes actin r fails t take actin between May 22 and the date the entire bill becmes law. With that much said, the cmmentary belw assumes May 22, 2008, as the effective date f the Farm Bill. Quick Summary A new categry f qualified frestry cnservatin bnds.

2 Cnservatin Reserve Prgram (CRP) payments are nt subject t self-emplyment tax in the hands f retired r disabled farmers. The lan limit n Aggie Lans is increased frm $250,000 t $400,000. The legislatin includes authrizatin f frest cnservatin bnds fr certain qualified prjects up t a maximum f $1.5 billin. The cellulsic ethanl per-galln tax credit is raised frm 51 cents t $1.01 per galln. A decrease in the credit fr ethanl prductin frm $.51 t $.45 per galln. A unifrm three-year depreciatin fr race hrses fr tax years An extensin f the special rules encuraging cntributins f capital gain real prperty fr cnservatin purpses. A tax deductin fr endangered species recvery and restratin csts. A deductin fr endangered species recvery expenditures. An exclusin fr certain payments and prgrams relating t fish and wildlife. A deductin fr qualified timber gains. An expansin f tax-deferred exchange treatment t specified prperty. A new agricultural chemicals security tax credit. A limitatin n farming lsses fr certain taxpayers. GO-Zne-style tax breaks fr specified areas in Kansas. A mdificatin in the methds fr cmputing net earnings frm self-emplyment. Infrmatin reprting fr CCC transactins. Detailed Analysis Cnservatin-related prvisins 1. An exclusin f Cnservatin Reserve Prgram Payments frm SECA tax fr individuals receiving Scial Security retirement r disability payments. Sec f the Act, amending I.R.C. 1402(a). Effective fr payments made after December 31, An extensin f the special rule encuraging cntributins f capital gain real prperty fr cnservatin purpses. Sec f the Act, amending I.R.C Effective fr cntributins made in taxable years beginning after December 31, 2007 and befre January 1, A deductin fr endangered species recvery expenditures. Sec f the Act, amending I.R.C Effective fr expenditures paid r incurred after May 22, Nte: The prvisin applies t expenditures that are paid r incurred by a taxpayer engaged in the business f farming fr the purpse f achieving site-specific management actins pursuant t the Endangered Species Act f Such expenditures are t be treated the same as expenditures fr the purpse f sil and water cnservatin made with respect t land used in farming, r fr the preventin f ersin f land used in farming. The same rules apply i.e., I.R.C. 175 expenses may nt exceed 25 percent f the taxpayer s grss incme derived frm farming during the tax year. 4. The Bill cntains tw majr prvisins relating t timber. A temprary reductin in the crprate tax rate fr qualified timber gain, and a reductin in the hlding perid requirement applicable fr real estate investment trusts. Secs f the Act, amending I.R.C. 856, 857 and Fr tax years ending after May 22, 2008, and beginning n r befre May 23, 2009, 2

3 a 15% alternative tax applies t the prtin f a crpratin's taxable incme that cnsists f qualified timber gain (r, if less, the net capital gain) fr a tax year. Nte: The Act als includes detailed changes fr REITs (real estate investment trusts) hlding timber prperty. Fr example, timber gain is included under I.R.C. 631(a) as a categry f statutrily recgnized qualified real estate incme f a REIT if the cutting is prvided by a taxable REIT subsidiary, and als includes gain recgnized under I.R.C. 631(b). The therwise applicable ne-year hlding perid des nt apply. Fr sales t a qualified rganizatin fr cnservatin purpses, the bill reduces frm 4 years t 2 years the hlding perid requirement under I.R.C. 857(b)(6)(D), which prvides a safe harbr frm prhibited transactin treatment fr certain timber prperty sales. The REIT changes apply t tax years beginning after May 23, 2008, but d nt apply after the last day f the first tax year beginning after May 23, A new categry f tax-credit bnds qualified frestry cnservatin bnds. Sec f the Act, creating new I.R.C. 54A and 54B. Effective fr bnds issued after May 22, A qualified frestry cnservatin bnd must be issued by a State r an I.R.C. 501(c)(3) rganizatin, and must be used t finance a qualified frestry cnservatin prject. may either remain with r be dnated t a State; All f the land must be subject t a habitat cnservatin plan fr native fish apprved by the U.S. Fish and Wildlife Service; and The amunt f acreage must be at least 400 acres. There is a natinal limitatin n qualified frestry cnservatin bnds f $500 millin. All f the available prject prceeds must be used within the three-year perid that begins n the date f issuance The issuer receiving an allcatin t issue qualified frestry cnservatin bnds may, in lieu f issuing bnds, elect t treat such allcatin as a deemed payment f tax that is equal t 50 percent f the amunt f the allcatin. Observatin: The prvisin, included in the Farm Bill by Senatr Max Baucus (D-MT), appears t apply t nly ne private landwner in the United States the Plum Creek Timber Cmpany (Mntana s largest private landwner). The cmpany had planned t sell abut 300,000 acres f land in the state fr apprximately $500 millin. It is anticipated that bnds will cver abut half f the purchase price. State and private mney is being sught fr the balance f the purchase price. The Nature Cnservancy has made applicatin fr the bnds. A qualified frestry cnservatin prject means frest land where: Sme prtin f the land acquired is adjacent t U.S. Frest Service Land; At least 50 percent f the land acquired is transferred t the U.S. Frest Service at n net cst and nt mre than half f the land acquired Energy-Related Prvisins 1. Credit fr the prductin f cellulsic bifuel. Sec f the Act, amending I.R.C. 40. Effective fr fuel prduced after December 31, 2008, and befre January 1, The credit is a nnrefundable incme tax credit fr each galln f qualified 3

4 cellulsic fuel prductin f the prducer fr the tax year. The amunt f the credit per galln is $1.01, except fr cellulsic bifuel that is alchl. Fr cellulsic bifuel that is alchl, the $1.01 credit amunt is reduced by: (1) the credit amunt applicable fr such alchl under the alchl mixture credit in effect at the time cellulsic bifuel is prduced, and; (2) in the case f cellulsic bifuel that is ethanl, the credit amunt fr small ethanl prducers as in effect at the time the cellulsic bifuel fuel is prduced. The reductin applies regardless f whether the prducer claims the alchl mixture credit r small ethanl prducer credit with respect t the cellulsic alchl. When the alchl mixture credit and small ethanl prducer credit expire after 2010, cellulsic bifuel will receive the $1.01 withut reductin. With respect t the small ethanl prducer tax credit, the 15 millin galln limitatin is waived fr cellulsic bifuel that is ethanl. Thus, the small ethanl prducer credit may be claimed fr cellulsic ethanl in excess f 15 millin gallns. The ther requirements fr the small ethanl prducer credit cntinue t apply fr ethanl ther than cellulsic ethanl, including the 15 millin galln limitatin. Cellulsic bifuel and alchls cannt qualify as bidiesel, renewable diesel, r alternative fuel fr purpses f the credit and payment prvisins relating t thse fuels Definitins: Qualified cellulsic bifuel is any cellulsic bifuel that the taxpayer either prduces and uses in their trade r business, r prduces and sells t anther persn fr the fllwing purpses: Fr use by the ther persn in the prductin f a qualified bifuel mixture in such persn s trade r business (ther than casual fffarm prductin); Fr use by the ther persn as a fuel in a trade r business; r Wh sells such bifuel at retail t anther persn and places the bifuel in the fuel tank f such ther persn Cellulsic bifuel is any liquid fuel that: Is prduced in the U.S. and used as fuel in the U.S. (including pssessins f the U.S.); Is derived frm any ligncellulsic r hemicellulsic matter that is available n a renewable r recurring basis (e.g., dedicated energy crps and trees, wd and wd residues, plants, grasses, agricultural residues, animal wastes, and ther waste materials and municipal slid waste); and Meets the registratin requirements fr fuels and fuel additives established by the EPA under the Clean Air Act (i.e., it must be apprved by the EPA) Nte: Cellulsic bifuel prducers must register with the IRS. The credit cannt be claimed unless the taxpayer is registered with the IRS as a prducer f cellulsic bifuel. 2. Mdificatin f the alchl credit. Sec f the Act, amending I.R.C. 40, While the prvisin is effective May 22, 2008, the impact f the change is effective fr calendar year 2009 and thereafter. The 51-cent-per-galln incentive (credit) fr ethanl is reduced t 45 cents per galln fr calendar year 2009 and 4

5 thereafter, and the lw-prf blender amunt is adjusted accrdingly t cents. Nte: If 7.5 billin gallns f ethanl (including cellulsic ethanl) are nt prduced in r imprted int the U.S. in 2008, the reductin in the credit amunt will be delayed. If the determinatin is made after the start f a calendar year, taxpayers claiming the reduced amunt befre the determinatin will be entitled t the difference between the crrect credit amunt fr that year and the credit amunt claimed (e.g., between 51 cents per galln and 45 cents per galln). 3. Calculatin f the vlume f alchl fr fuel credits. Sec f the Act, amending I.R.C. 40. Effective fr fuel sld r used after December 31, The existing per-galln credit fr the vlume f alchl (including any denaturant) used as a fuel r in a qualified mixture is mdified such that the amunt f allwable denaturants cannt exceed tw percent f the vlume f the alchl. 4. Extensin f the ethanl tariff. Sec f the Act. Effective May 22, The $.54 per galln tariff n imprts f ethyl alchl, and any mixture cntaining ethyl alchl if used as a fuel r in prducing a mixture t be used as a fuel that enters the U.S. is extended tw years - thrugh Other Farm-Related Prvisins 1. Qualified small-issue bnds fr first-time farmers. Act, Sec , amending I.R.C Effective fr bnds issued after May 22, The Act increases the maximum amunt f qualified small-issue bnd prceeds available t first-time farmers t $450,000 and indexes the amunt fr inflatin. Nte: Qualified small issue bnds are tax-exempt bnds issued by State and lcal gvernments t finance private business manufacturing facilities r the acquisitin f land and equipment by certain first-time farmers. Cncerning first-time farmers, t qualify, the individual: (1) must nt have had any direct wnership interest in substantial farmland in which the individual materially participated; and (2) must nt have received mre than $250,000 in qualified small issue bnd financing. Substantial farmland had been defined as any parcel f land unless the parcel is smaller than 30 percent f the median size f a farm in the cunty in which the parcel is lcated, and the fair market value f the land des nt at any time while held by the individual exceed $125,000, but the Act eliminates the fair market value test frm the definitin. 2. Allwance f I.R.C treatment fr exchanges invlving certain mutual ditch, reservir r irrigatin cmpany stck. Sec f the Act, amending I.R.C Effective fr transfers after May 22, Explanatin f current law: In general, I.R.C. 1031(a)(2), tax-deferred treatment des nt apply t any exchange f stck in trade r ther prperty held primarily fr sale, stcks, bnds r ntes, ther securities r evidence f indebtedness r interest, interests in a partnership, certificate f trust r beneficial interests, r chses in actin Farm Bill prvisin: Fr transfers after May 22, 2008, tax-deferred treatment applies t shares in a mutual ditch, reservir, r irrigatin cmpany, if at the time f the exchange: (1) the cmpany is an rganizatin described in Cde 5

6 Sec. 501(c)(12)(A) (determined withut regard t the percentage f its incme that is cllected frm its members fr the purpse f meeting lsses and expenses); and (2) the shares in the cmpany have been recgnized by the highest curt f the State in which the cmpany was rganized r by applicable State statute as cnstituting r representing real prperty r an interest in real prperty. Other measures prvided fr by regulatin Eligible agricultural businesses are thse that: Sell agricultural prducts including specified agricultural chemicals, at retail predminantly t farmers and ranchers; r 3. Creatin f an agricultural chemicals security tax credit. Act, Sec , creating I.R.C. 38(b)(1). Effective fr expenses paid r incurred after May 22, 2008, and befre December 31, A new 30 percent credit fr qualified chemical security expenditures. The credit is a cmpnent f the general business credit and is limited t $100,000 per facility with each taxpayer s annual credit limited t $2,000,000. A taxpayer s deductible expense is reduced by the amunt f the credit claimed. Qualified chemical security expenditures incurred by an eligible agricultural businesses are amunts paid fr: Emplyee security training and backgrund checks; Limitatin and preventin f access t cntrls f specific agricultural chemicals stred at a facility; Tagging, lcking tank valves, and chemical additives t prevent the theft f specific agricultural chemicals r t render such chemicals unfit fr illegal use; Prtectins f the perimeter f areas where specified agricultural chemicals are stred; Installatin f security lighting, cameras, recrding equipment and intrusin detectin sensrs; Implementatin f measures t increase cmputer r cmputer netwrk security; Cnducting security vulnerability assessments; Implementing a site security plan; and Manufacture, frmulate, distribute, r aerially apply specified agricultural chemicals Specified agricultural chemicals is defined as: Fertilizer cmmnly used in agricultural peratins that are listed under 302(a)(2) f the Emergency Planning and Cmmunity Right-t- Knw Act f 1986, sectin 101 r part 172 f title 49, Cde f Federal Regulatins, r part 126, 127 r 154 f title 33, Cde f Federal Regulatins; and Any pesticide (as defined in sectin 2(u) f FIFRA, including all active and inert ingredients which are used n crps grwn fr fd, feed r fiber. 4. Three-year depreciatin fr all race hrses. Sec f the Act, amending I.R.C Effective t any race hrse that is tw years ld r yunger at the time that it is placed in service after December 31, 2008 and befre January 1, Nte: Under prir law, a seven-year MACRS recvery perid was assigned t any race hrse tw years ld r yunger at the time that it was placed in service, but a three-year MACRS recvery perid was assigned t any race hrse mre than tw years ld at the time it was placed in service. The prvisin effectively creates a single three-year MACRS recvery perid fr all race hrses. 6

7 5. Mdificatin f the advanced cal prject credit and the gasificatin prject credit. Sec f the Act, mdifying I.R.C. 48A and 48B. Effective fr credit allcatin awards issued befre, n, r after May 22, Limitatin n farming lsses f certain taxpayers. Sec f the Act, mdifying I.R.C Effective fr taxable years beginning after December 31, Farming lsses f a taxpayer (ther than a C crpratin) are limited, fr any taxable year in which the taxpayer receives farm subsidies, t the greater f $300,000 (MFJ) r the taxpayer s ttal net farm incme fr the prir five taxable years. Ttal net farm incme is defined as the aggregatin f all incme and lss frm farming businesses fr the prir five taxable years. Nte: Fr purpses f the prvisin, applicable subsidies are any direct r cunter-cyclical payments under Title I f the Farm Bill r any CCC lan. Fr purpses f calculating ttal net farm incme fr the prir five years, lsses that are limited under the prvisin are taken int accunt in the year in which they are allwed as a deductin. Example: Frank and Mary, a farm cuple, have a $500,000 excess farm lss in 2010 that is nt allwed as a deductin until The calculatin in 2011 f ttal net farm incme fr the prir five years des nt take int accunt the $500,000 as a farm lss. Instead, the $500,000 lss wuld be included in the calculatin f the prir year s ttal net farm incme fr taxable years 2013 thrugh Fr partnerships and S crpratins, the limit is applied at the partner r sharehlder level. Thus, each partner r sharehlder takes int accunt its prprtinate share f incme, gain, r deductin frm farming businesses f a partnership r S crpratin, and any applicable subsidies received by a partnership r S crpratin during the taxable year (regardless f whether such items are treated as incme fr Federal tax purpses). Farming business is defined in accrdance with I.R.C. 263A(e)(4), except that the prcessing f cmmdities is included in the definitin. As applied t cperatives, the farming activities f a cperative are attributed t each member fr purpses f the definitin f a farming business. Thus, a member f a cperative wh raises a cmmdity and sells it t the cperative fr prcessing is cnsidered t be the prcessr f the cmmdity. Accrdingly, patrnage dividends received frm a cperative that is engaged in a farming business are cnsidered t be incme frm a farming business. Any lss that is disallwed under the prvisin in a particular year is carried frward t the next taxable year and treated as a deductin attributable t farming businesses in that year. Farming lsses resulting frm fire, strm, r ther casualty, r by reasn f disease r drught, are disregarded fr purpses f calculating the limitatin. 7. An increase in and indexing f the dllar threshlds fr farm ptinal methd and nnfarm ptinal methd fr cmputing net earnings frm self-emplyment. Sec f the Act, amending I.R.C. 1402(a). Effective fr taxable years beginning after December 31, An individual may elect t use the farm ptinal methd r the nnfarm ptinal methd when calculating net earnings frm self-emplyment fr SECA purpse. The farm ptinal methd allws individuals t pay SECA taxes (and secure 7

8 Scial Security benefit cverage) when they have lw net incme r lsses frm farming. The nnfarm ptinal methd is similar t the farm ptinal methd. Fr tax years beginning after 2007, taxpayers electing the farm ptinal methd are eligible t secure fur credits f Scial Security benefit cverage each tax year by increasing and indexing the applicable threshlds. Similar mdificatins are made t the nnfarm ptinal methd. 8. GO-Zne-style tax breaks fr Kiwa Cunty, Kansas and the surrunding area. Sec f the Act, amending I.R.C. 1400S(b). Nte: Fr purpses f the Act, Kansas disaster area means an area with respect t which a majr disaster has been declared by the President under Sec. 401 f the Rbert T. Staffrd Disaster Relief and Emergency Act (FEMA-1699-DR, as in effect n May 22, 2008) by reasn f severe strms and trnads beginning n May 4, 2007, and determined by the President t warrant individual r individual and public assistance frm the Federal Gvernment under such Act with respect t damages attributable t strms and trnads. Persnal casualty r theft lsses are deductible withut regard t either the $100 limitatin r the 10 percent-f-agi limitatin. Effective fr lsses arising after May 3, An extensin f the replacement perid fr invluntarily cnverted prperty fr nn-recgnitin f gain purpses frm tw t five years. Substantially all f the use f the replacement prperty must be in the Kansas disaster area. Effective May 22, An extensin f the emplyee retentin credit (applicable t emplyers impacted by Hurricanes Rita, Wilma and Katrina) t the Kansas disaster area. The credit (I.R.C. 1400R) prvides a 40 percent credit f the qualified wages (up t a maximum f $6,000 in qualified wages per emplyee) paid by an eligible emplyer t an eligible emplyee). With respect t the Kansas disaster area, the credit nly applies t eligible emplyers wh emplyed an average f nt mre than 200 emplyees n business days during the taxable year befre May 4, Effective May 22, Additinal 50 percent bnus first-year depreciatin fr prperty that meets the fllwing requirements: The prperty must be prperty t which the general MACRS rules apply: Applicable recvery perid f 20 years r less; Cmputer sftware ther than cmputer sftware cvered by I.R.C. 197; Water utility prperty; Certain leasehld imprvement prperty; r Certain nnresidential real prperty and residential rental prperty. Substantially all f the use f the prperty must be in the Kansas disaster area and be used in the active cnduct f the taxpayer s trade r business. The riginal use f the prperty must cmmence with the taxpayer n r after May 5, The prperty must be acquired by purchase (as defined by I.R.C. 179(d)) by the taxpayer n r after May 5, 2007 and placed in service n r befre December 31, 2008 (December 31, 2009, fr qualifying nnresidential real prperty and residential rental prperty). Nte: Prperty des nt qualify if a binding written cntract fr the acquisitin f such prperty was in effect 8

9 befre May 5, But, prperty is nt precluded frm qualifying fr bnus depreciatin merely because a binding written cntract t acquire a cmpnent f the prperty is in effect befre May 5, Prperty that is manufactured, cnstructed r prduced by the taxpayer fr use by the taxpayer qualifies if the taxpayer begins the manufacture, cnstructin r prductin f the prperty after May 4, 2007, and befre January 1, 2009, and the prperty is placed in service n r befre December 31, 2008 (and all ther requirements are met). Increased expense methd depreciatin by the lesser f $100,000 r the cst f qualified prperty fr the taxable year that is acquired n r after May 5, 2007, and placed in service n r befre December 31, The threshld fr reducing the amunt expenses is the lesser f $600,000 r the cst f the qualified prperty placed in service during the tax year. Fr purpses f the prvisin, qualified prperty must: Have an applicable recvery perid f 20 years r less; 5, 2007, but nly if n binding cntract fr the acquisitin was in effect befre May 5, 2007, and be placed in service by the taxpayer n r befre December 31, Enhanced expensing fr certain demlitin and clean-up csts f up t 50 percent f any qualified Recvery Assistance clean-up cst paid r incurred during the perid beginning n May 4, 2007, and ending n December 31, The remaining 50 percent is capitalized int the taxpayer s basis in the land n which the structure is lcated. A qualified Recvery Assistance clean-up cst is an amunt paid r incurred fr the remval f debris frm, r the demlitin f structures n, real prperty lcated in the Kansas disaster area t the extent that the amunt wuld therwise be capitalized. T qualify, the prperty must be held fr use in a trade r business, fr the prductin f incme, r as inventry. Availability f the rule cncerning special tax treatment f public utility prperty disaster lsses. Be cmputer sftware ther than cmputer sftware cvered by I.R.C. 197; Be water utility prperty; r Be certain leasehld imprvement prperty Als, substantially all f the use f the prperty must be in the Kansas disaster area and be used in the active cnduct f the taxpayer s trade r business. Likewise, the riginal use f the prperty must cmmence with the taxpayer n r after May 5, 2007, and the taxpayer must acquire the prperty by purchase n r after May Taxpayers incurring casualty lsses attributable t the Kansas strms and trnads with respect t public utility prperty lcated in the Kansas disaster area may make an electin t take such lsses int accunt in the fifth taxable year (rather than the first) immediately preceding the taxable year in which the lss ccurred. Nte: If applicatin f the electin results in the creatin r increase f a net perating lss fr the year in which the casualty lss is taken int accunt, the net perating lss may be carried back r carried ver subject t the 9

10 usual rules fr net perating lsses. Special treatment fr net perating lsses attributable t strm lsses. The prvisin mirrrs the rules prvided fr GO-Zne lsses under I.R.C. 1400N(k). Use f retirement funds frm retirement plans. The legislatin prvides relief similar t the relief prvided in I.R.C. 1400Q with respect t use f retirement funds in cnnectin with the trnades and strms ccurring in the Kansas disaster area. 9. Infrmatin reprting fr cmmdity credit crpratin transactins. Sec f the Act, creating new I.R.C. 6039J. Effective fr lans repaid n r after January 1, Nte: Fr lans repaid n r after January 1, 2007, IRS Ntice prvides that the CCC reprts that the CCC reprts market gain assciated with the repayment f a CCC lan irrespective f whether the taxpayer repays the lan with cash r uses CCC certificates in repayment f the lan. The CCC reprts the market gain n Frm 1099-G. 10