How to Create Per-Unit-Retains for 1099PATR

Objectives

Version 18.1 (January 2018) released a completely re-vamped Patronage per-unit-retains function. This function will give you a better way to update the per-unit-retains for the 1099 reporting and it will also allow imports to stop.

• Determining the Amount of the 1099 Per-Unit-Retain to distribute to each patron.

• Learn about all the small questions to be answered in regards to how you distribute per-unit-retains.

• Learn how to run the report that will auto update per-unit-retains.

• Learn how to create spreadsheets, if you still want to import instead of auto update.

• Learn how to make Corrections to the dollar amounts for each patron.

Per-Unit-Retains – what are they

The per-unit-retains is the amount that represents the Patron's farm products that were sold to a cooperative, which is the Coop's Grain Purchases & the Farmers grain sales. This amount, reported in Box 3 of the 1099-Patr, is fixed based on the grain settlements, regardless of the income/loss that the cooperative received. This becomes income to the farmer and they must report it as such. If the income on the Form 1099-Patr (per-unit-retains) does not match the income reported on a Schedule F of the individual's income tax return, the farmer would receive a notice from the IRS advising them that their income was understated and more tax is due.
So this process is all about reporting a Patrons Grain Sales to the IRS, if the sales were done via a Coop that the Patron is a member of.

Things to Know

• Name id must be marked YES or WITHHOLDING for ACCUMULATE PATRONAGE.  
  NAM > Name id Maintenance > Select Name > general information > Accumulate Patronage must equal Yes or Withholding.

• The new Per-unit-Retain reporting will allow you to update the per-unit-retain with three possible calculations: * Gross = Net Quantity times Contact Price* Net = Settlement Amount* Value of Grain = Gross adjusted by all "value discounts" such as Moisture, FM, Test Weight, Etc. but not by service charges such as Weighing and inspection fees, storage charges, etc.

• It is our understanding that gross dollars are to be reported for the activity in a given calendar year less non-value deduction such as storage, drying, trucking, check-off expenses, etc.  Please check with your auditor to verify.  But note that you will now have 3-options of what value to post so we can handle however your auditor recommends.

• The Section 199 Per-Unit-Retains are to be reported in Box 3 of the 1099-PATR form.

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• It is recommended that you create a folder in My Documents or on your desk top. Use this folder to store the reports that you will be creating. The reports are one-time reports so spool them to the spool, then save an electronic copy somewhere else.

• Settlement Split Name id: The per-unit-retain calculation is designed to print based on the settlement split name id. This is the person that received the check.

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• There is now a standard import report for importing source Allocations. AGRIS > Pat > Report manager > Advanced Reports > Per-Unit-Retain Allocation Export (AGEXPIMP.CSV>this will create the import file and allow you to tweak the values before importing them into the system.

Business Rules

The following business rules will be used to determine the per-unit retain allocation:
Each of the topics below refers to each split payment distribution of Purchase Settlements.  The settlement split Name ID is used to determine each party's share of the Grain Value toward their Per-Unit Retain allocation. 

Examples

The following examples are supplied to explain the different methods of settlement distribution.  Each of the examples will report the appropriate value of grain purchases, regardless of how each of the split Name IDs were "paid" (by check, credit memo, A/R invoice, etc).
These examples assume that the DM discount (Damage) is set up as a discount that does affect the value of the grain, but SC (Storage Charges) does not affect the value.