To be an ACA or not to be (February 2000)

One hallmark of the FCS since Congress bailed it out in 1987 has been consolidation within the system. Not only have associations consolidated geographically, but a number of Production Credit Associations have merged with the Federal Land Bank Association or the Federal Land Credit Association serving the PCA's territory to form a new type of entity, an Agricultural credit Association (ACA). The IRS has ruled that ACAs are subject to corporate income taxation, just like a Production Credit Association, even though ACAs do real estate lending.