This past year has been extremely difficult for Wisconsin farmers. With increased debt loads and diminishing asset values, producers may be wondering if their farms will be viable businesses in the future. To be viable, a farm must be able to pay for its necessary assets over a reasonable period of time. In addition, its assets must be able to produce income greater than the cost to produce that income.
Retirement planning requires a clear-eyed analysis of future needs and income. Yet many individuals view retirement through rose-colored glasses.
Mess with assessments for property tax and landowner attention perks up. Well, make that if the rate is raised, attention perks up.
Hopefully, you bought the home farm when cattle, equipment and land prices were reasonable. You may have farmed in the ’70s, when more of the income went to the bottom line so debt could be paid off in a reasonable time. You may have farmed and bought additional land in the ’80s and ’90s, during that difficult period of flat milk prices, high interest rate and rising cost of operation.
Many concepts have been illustrated with a pyramid: financial planning, relationships, diet and Maslow’s hierarchy of needs are a few that come to my mind. The way you and your advisers should approach estate planning also could be illustrated with a pyramid.
Some estate planning strategies allow you to integrate income tax reduction and personal goals. For this reason, your planning should consider the pros and cons of complex trusts.
As you consider estate planning, you might feel the desire to keep land in the family without unnecessarily tying your heirs’ hands.
Your Social Security numbers and tax ID numbers are highly confidential, and need to be kept as such. Consider these tips on protecting them from Gary Markey, of the Stambaugh Ness accounting and business consulting firm, headquartered in York, Pa.
Your family farm is sustainable because you made the necessary changes to keep it efficient, profitable and competitive. But in spite of all your work, it hasn’t gotten easier. You operate with limited cash flow, rising operating and family living expenses, and maybe high debt from making needed improvements.
Joe stopped by the other day to talk about the need to update his and his wife’s wills. Joe’s father recently died, and it made him think about what would happen to his young children if he and his wife should die prematurely.
I got a call from a reader named Tom who said he had prepared his will and was glad to have his estate planning done. Unfortunately, preparing a will is only part of the process of estate planning, and only one of the tasks that need to be completed. There are several other issues that need to be addressed in the estate planning process. Some of them are discussed in this article.
Frequently, I receive questions regarding the sale or transfer of farm machinery between one generation and the next. The rules for taxation of depreciable assets are complicated.
For 34 years, Don Gibbs was a berry farmer. But for the past six years, he’s been a farmland owner and observer, watching his lifetime accomplishments continue on.
Rob and Regina Richardson are in their late 50s, and while retirement is still several years away, they feel good knowing that their son, Roy, will continue farming their land.
Statistically, nearly 50% of marriages end in divorce. One primary reason a marriage may not succeed is that the couple failed to discuss, prior to the marriage, their expectations of their long-term commitment to one another. For example, engaged couples often do not talk about how money will be spent, how careers will change or not change, how children should be disciplined or how to deal with annoying in-laws.
As a farmer, your estate planning goals probably include avoiding the costs, delays and public disclosure of probate in your county court. A neighbor may have told you his estate plan is set up to avoid going to court. You may have experienced court probate after the death of a parent or other family member. You may just be wondering whether you should have a living trust.
Uncle Sam, all niceties aside, it’s time you wake up and smell the manure! It’s your doing! America’s most taxing problem is your spending problem.
In December, President Barack Obama signed the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. Here’s a rundown of some key provisions.
September’s hike of Section 179 enhanced depreciation and return of bonus depreciation (the Small Business Jobs and Credit Act) sounds enticing. Got any sage advice of benefit — other than spend, spend, spend? Would the exclusion of gains on small-business stock benefit our partnership or corporation?
The Small Business Jobs and Credit Act provides numerous tax incentives targeted to small business owners. Here are some key provisions that may benefit agriculture.
There are many different kinds of trusts including, but not limited to, marital trusts, charitable trusts, revocable trusts, irrevocable trusts, family trusts, living trusts and even pet trusts.
Dad and I have had long, sometimes heated arguments over whether to stay in the dairy business. He doesn’t want to spend money for technology to keep up. I say you have to invest forward. He owns the farm (230 acres). We average 17,680 pounds on 143 cows with a 480,000 somatic cell count (SCC). What’s your counsel? Should I look for opportunities elsewhere?
Last month I discussed how farmers with excess money could reduce their taxes by giving money to their children and grandchildren with cash or grain gifts.
Sometimes the best plans go awry. So it is with income tax planning.Most of the time, taxable income is optimized during an appointment held shortly before
Here’s a look at how some Dakota farmers and ranchers are transferring ownership and management control.
David Kohl is a Virginia Tech professor emeritus and president of AgriVisions LLC, a knowledge-based consulting business providing cutting-edge programs to agricultural organizations worldwide.
Planning for the future of your farm and how to entrust it to the next generation is just as important as planning your seeds and inputs. Angela Gloy, Purdue University Extension ag economist, says discussing and implementing farm succession planning goes a long way to ensure amiable family dinners.
Farms in transition have more opportunities than ever to transfer large amounts of assets to the next generation without incurring huge income tax liabilities. Several of the current opportunities include the new $5 million gift tax exemption, low applicable federal interest rates and a continuation of the low capital gains rates.
Insurance is tricky. It has more loopholes than one can count. Each policy is different, and each farm makes it so.
Perhaps you have heard the story of Wellington R. Burt, a man at one time among the eight wealthiest Americans. Under the terms of his will, the bulk of his estate was not to be distributed until 21 years after the death of his last surviving grandchild. Now, 92 years after his death, 12 of his distant heirs will share his estate, currently valued at around $110 million.
Some things seem like they should be easy — and they can be easy. However, some things simply appear easy, even when they are very difficult. For example, crossing a field of 50 yards seems simple, right? However, if that field is a minefield, it might be a very hazardous crossing indeed! On the surface, both fields might appear the same to the ordinary person. However, experts can spot the hidden problems which the ordinary person may not.
If you want your farm or ranch to continue after you die or retire, your No. 1 job now is to find someone who can take over and be successful.
As the new guy on the farm, Justin Martz has a singular goal: be a sponge. “I want to soak up as much knowledge as my partners are willing to share,” he says.
Darrell Dunteman has an ironically simple recipe for bringing the next generation into the family farming operation.
The 2010 Tax Relief Act lowers estate taxes for 2011 and 2012 by increasing the exemption from $1 million to $5 million (as indexed after 2011), and reducing the top rate from 55% to 35%. The $5 million exemption is per person, with a $10 million exemption for married couples. Many more farm families have a value that comes in under the exclusion amounts.
Congress’ gridlock on estate taxes may be your opportunity to act.
Soaring farmland values in 2011 and the continuing increase into this year are raising a number of questions. Important questions if you own land are: How is this rapid increase affecting your estate plan? Is your present plan outdated?
I own land with my three siblings. Two of them want to sell now at these high land prices and two of us don’t. What do you think? What are our options?
One of the top reasons we procrastinate on a project is because we feel overwhelmed. We don’t know where to start, so we don’t start at all. Or, the end goal seems unreachable, and we don’t know which path to take to get there, so we avoid it altogether. I am guilty of this myself, and I see it every day in my estate planning practice.
Ask an ag economist about the estate tax situation, and he may ask if you want the good news, worst possible news or so-so news first.
There are 10 million acres of ag land in Michigan and nearly a third are enrolled in the state’s temporary farmland preservation program, commonly known as P.A. 116.
If you were severely injured or died today, would your spouse or family know what to do with the farm? Who would milk the cows tonight, tomorrow or next week? Who would plant the crops or harvest hay? Would your family be able to make sound decisions regarding the farm’s future in a time of severe stress or grieving? Unfortunately, this situation happens far too often for many families; the main farm manager or owner suddenly is injured or passes away, and the famil
In March, the United States Congress passed the Patient Protection and Affordable Care Act, often referred to as “Obama Care.”
The economic forecast for agriculture is sunshine and storm clouds with a high likelihood for both, according to economist David Kohl.
Northeast Iowa farmers Tom and Irene Frantzen have so many questions to consider about their farm legacy: Should the farm pass to their children? What if they don’t have lineal descendants in the future? What will happen if one of them gets a major illness next year? Is more life insurance needed? How do they ensure that their farm continues as a conservation farm in perpetuity?
There’s plenty of good legal advice available on how to transfer a farm or ranch to the next generation. But you probably haven’t heard a list of transition tips that are as practical or as down-to-earth as Ray Erbele’s.
What is it that keeps a family from successfully navigating a generational farm transfer? If the answer were simple, more people would complete a successful transfer.
Exactly 150 years ago, four fundamental pieces of agricultural legislation were passed in Congress and signed by President Abraham Lincoln.
Nebraska’s agricultural real estate values jumped 31% in the last year, the largest increase in the 34-year history of the University of Nebraska-Lincoln’s annual survey.
Farmers who pay income taxes on a cash basis have been adept at shifting farm income and expenses into the tax year that’s most advantageous.
Whether you have a business with 25 employees or own a small ranch or farm with just family working together, one factor is essential to the success of the business.
Now in their mid-fifties, Ralph and Richard Renegar were raised on tobacco. Today they have two grown sons of their own: Ralph’s son, Dustin, and Richard’s son, Justin. And like their fathers before them, Dustin and Justin were raised growing tobacco on Hoot ’N Hollar Farms, the family’s Harmony, N.C., operation. But with the exception of Hank Williams Jr., perhaps, tradition can only take you so far.