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<blockquote data-quote="farmerjan" data-source="post: 1607279" data-attributes="member: 25884"><p>If you are back "home" talk frankly to someone you know, about it. Maybe ask to talk to their tax person, not about them, but to get insight into the ins and outs from an actual tax persons' perspective. One other thing you might consider, having someone else rent the "farm" to give you a small but definite income, to qualify for all tax advantages on land use taxes, and then to see if the write-offs can still be applied to the "farm" but with someone else taking the risk with the animals.</p><p> Alot of "richer" people do buy farms and use them for write-offs. But many of us that actually do the farming don't like the rich write off people because they inflate the value of the land, which we know that the farming enterprise cannot possibly support the price of the land and farm. I get that you work and make a fairly decent wage and that you are seeing it get eaten up by taxes. Land is always an investment, and a hedge against the future of this country that may just go totally nuts if some of the socialistic policies get implemented. You may just need that farm to produce enough food to eat and keep your family alive if the tax situation continues to get worse and the gov't keeps wanting to tax the "rich" in order to give everything away to the "less fortunate" for free. </p><p></p><p>I really think an accountant, with tax knowledge of farming, would be the best bet for some real advice. If you are thinking to have this be your future home, then you are basically buying a large plot of land for your home, and then develop the rest for ways to reduce your taxes. </p><p></p><p>Another thing to consider. All the tax things aside. You are not going to be able to run very many head on that place. 37 acres total.....2 for the house, 5 pasture, 11 tillable, 18 in timber. It will take a couple years to get the timber all cleared and make a good pasture. What are the plans for the tillable? If you are planning to buy in the spring sell in the fall, the tillable can be just grazed. So say you have 30 grazeable acres, just for round figures. You will not be able to run more than 1 head per acre, with some rotational grazing, hedging against a year of drought, or too much rain, or something. If you buy 500 lb steers at todays' prices they are going to cost about 1.40 lb. That's 700 each. X 30 =21,000. If NOTHING goes wrong, in a perfect scenario.... they will gain 1-2 lbs per day........ So say 5 months=150 days. 2 lbs per day = 300 lbs. Now they weigh 800 lbs. They will be worth 1.25-1.30 lb at that weight. So at 1.25 that's 1,000 each . That's 300 each for 5 months work of grazing..... NOT COUNTING..... mineral, fly control, problems like pinkeye, getting loose and having to go chase them somewhere, doctoring for a sore foot, maybe some pnuemonia of something that will require a catch pen and head chute...vet costs at 100 per hour at least.... (infrastructure costs) ......not getting the weight gain, and losing one or two on occasion which happens to all of us.......</p><p>So you spend 21,000 on 30 animals, get back 30,000 on 30 animals, figure in all your initial cattle costs.... and you might actually see 20-25,000 in a good year. You have spent COUNTLESS hours at (what is your time really worth?) ????? Yes, you can lose money legitimately, for a tax write off......</p><p>And realistically, you are looking at more like 20 head on very good grazing. More like 1 head per 2 acres .....so do the math from there. The grazing will have to be planted on the timbered acres, it will not be very productive for a couple years as the stand of grass develops into a good sod. </p><p>This is not "done to scale". But it is trying to give you some very very generalized numbers. Is it really worth it? A tax expert can tell you that in your income situation. But again, if you are going into this to lose money, then yes, you can easily do it.</p></blockquote><p></p>
[QUOTE="farmerjan, post: 1607279, member: 25884"] If you are back "home" talk frankly to someone you know, about it. Maybe ask to talk to their tax person, not about them, but to get insight into the ins and outs from an actual tax persons' perspective. One other thing you might consider, having someone else rent the "farm" to give you a small but definite income, to qualify for all tax advantages on land use taxes, and then to see if the write-offs can still be applied to the "farm" but with someone else taking the risk with the animals. Alot of "richer" people do buy farms and use them for write-offs. But many of us that actually do the farming don't like the rich write off people because they inflate the value of the land, which we know that the farming enterprise cannot possibly support the price of the land and farm. I get that you work and make a fairly decent wage and that you are seeing it get eaten up by taxes. Land is always an investment, and a hedge against the future of this country that may just go totally nuts if some of the socialistic policies get implemented. You may just need that farm to produce enough food to eat and keep your family alive if the tax situation continues to get worse and the gov't keeps wanting to tax the "rich" in order to give everything away to the "less fortunate" for free. I really think an accountant, with tax knowledge of farming, would be the best bet for some real advice. If you are thinking to have this be your future home, then you are basically buying a large plot of land for your home, and then develop the rest for ways to reduce your taxes. Another thing to consider. All the tax things aside. You are not going to be able to run very many head on that place. 37 acres total.....2 for the house, 5 pasture, 11 tillable, 18 in timber. It will take a couple years to get the timber all cleared and make a good pasture. What are the plans for the tillable? If you are planning to buy in the spring sell in the fall, the tillable can be just grazed. So say you have 30 grazeable acres, just for round figures. You will not be able to run more than 1 head per acre, with some rotational grazing, hedging against a year of drought, or too much rain, or something. If you buy 500 lb steers at todays' prices they are going to cost about 1.40 lb. That's 700 each. X 30 =21,000. If NOTHING goes wrong, in a perfect scenario.... they will gain 1-2 lbs per day........ So say 5 months=150 days. 2 lbs per day = 300 lbs. Now they weigh 800 lbs. They will be worth 1.25-1.30 lb at that weight. So at 1.25 that's 1,000 each . That's 300 each for 5 months work of grazing..... NOT COUNTING..... mineral, fly control, problems like pinkeye, getting loose and having to go chase them somewhere, doctoring for a sore foot, maybe some pnuemonia of something that will require a catch pen and head chute...vet costs at 100 per hour at least.... (infrastructure costs) ......not getting the weight gain, and losing one or two on occasion which happens to all of us....... So you spend 21,000 on 30 animals, get back 30,000 on 30 animals, figure in all your initial cattle costs.... and you might actually see 20-25,000 in a good year. You have spent COUNTLESS hours at (what is your time really worth?) ????? Yes, you can lose money legitimately, for a tax write off...... And realistically, you are looking at more like 20 head on very good grazing. More like 1 head per 2 acres .....so do the math from there. The grazing will have to be planted on the timbered acres, it will not be very productive for a couple years as the stand of grass develops into a good sod. This is not "done to scale". But it is trying to give you some very very generalized numbers. Is it really worth it? A tax expert can tell you that in your income situation. But again, if you are going into this to lose money, then yes, you can easily do it. [/QUOTE]
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