My last post ended with $500K left on the table, my new wife and I were two "persons", each with a $250K payment limitation. I go back to Sharpie Sam, who's advising me how to get around FSA's rules.
Under the old, "two entity" rules, my wife and I could have placed half the operation in an irrevocable trust, or a corporation, for benefit of our children to be. The corporation would have provided land and capital, and perhaps hired labor or management company to provide its share of those inputs. If we each owned fifty percent, the corporation might have been recognized as a separate "person" with its own $250K limit. To the extent the corporation shared in the risk of producing the crop, and received subsidy payments, the payments would count against its limit.
It would be considered separate because no one had more than a 50 percent share. If it was owned 2/3 me, and 1/3 my wife, it would be considered to be an entity combined with me as one "person". Any payments made to the corporation would be charged against my limit.
The two entity rule allowed people to get very creative. For example, if you pull up the Environmental Working Group's database, in 2002 there were 14 owners of Perthshire Farms,* each with a 7.1 percent interest
There are 3 individuals, and 11 corporations, each of which is shown as owned by Perthshire FArms. (I'm not sure what's going on there--it's not clear to me how EWG set up the database to receive FSA data.) CBS did a report back in the early 90's on the problem of these "Mississippi Christmas trees".
So Bush is proposing to end the two entity rule.
*corrected
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