* For 2011, long-term capital gains and qualified dividends have a zero tax rate for those in the 10 or 15 percent tax bracket and a 15 percent rate for those in higher tax brackets.
Here is what producers can do before the end of the year to limit their tax liability:
* Prepay farm expenses. Feed, fertilizer, seed and similar expenses can be prepaid. Typically, discounts are received by paying for these expenses in the fall. Producers can deduct prepaid expenses that do not exceed 50 percent of their other deductible farm expenses.
* Pay real estate taxes or interest. Paying taxes or interest can be done before the end of the year to increase 2011 expenses.
* Defer income to 2012. Crop and livestock sales can be deferred until the next year by using a deferred payment contract. Most grain elevators or sales barns will defer sales until the next tax year. Producers should be aware that they are at risk if the business becomes insolvent before the check is received and cashed.
* Purchase machinery or equipment. Machinery or equipment purchases can be made before the end of the year to get a depreciation or 179 expense deduction in 2011.
Information on agricultural topics can be found in the Farmers Tax Guide, Publication 225. It can be obtained at any IRS office or can be ordered by calling (800) 829-3676. Any questions about these topics should be addressed to your tax professional or the IRS at (800) 829-1040 or http://www.irs.gov. North Dakota income tax questions can be addressed to the North Dakota Tax Department at (877) 328-7088 or http://www.nd.gov/tax/.