Counting Your Money

[dave_shelby]

If anyone is serious about not paying taxes then they will not own cars, trucks, home, land and who knows where they'll buy what they need.

I've met a few folks who refuse to pay income tax - and yes I hate the tax system too. With the amount of work they put into avoidance and the lost opportunity every one could be a whole lot wealthier.

 

[rocfarm]

Unless you inherit/purchase using another income stream a lot of equipment/land that you don't factor in as cost or are market/tax savvy, cattle tend to be cash negative. That said, there are many angles to make money. But most folks in central Texas don't care so much if they made money on their small herd when land prices go up by 30% in one year, BTW.

Also hard to put a price on having your own land to use as a family refuge and gathering place. Knowing you provide good land management that helps wildlife to thrive also an intangible benefit.

Cheers to profits for all of us, in whatever healthy form they may take.

 

[Travlr]

I've met a few folks who refuse to pay income tax - and yes I hate the tax system too. With the amount of work they put into avoidance and the lost opportunity every one could be a whole lot wealthier.

Funny... I've been watching this discussion and wondering...

I don't personally mind paying taxes. I work the tax system like I worked my ranch to get the most out of it. It doesn't take a lot of work to avoid most taxes. I've even gotten more back than I paid in, some years. And what would we have for roads, schools, and a military to protect our nation if there were no taxes? Sure... it's popular to gripe... but does anyone really want to live in a country where we don't have the things we have which are paid for with taxes?

If I'm going to gripe it's going to be about how taxes are being spent. We pay much more for things through governmental largesse than we need to. But governmental spending has value too... I just see the way taxes are spent as lazy thinking. I mean, there is no meaningful negotiating being done. And don't even get me started on the pure waste, like the way we gathered 35K horses off the open range to feed them until they died in dirt corrals while leaving so many horses on the range that they repopulated to higher numbers now... and we are paying 100 million dollars a year to feed, house, and care for the gathered horses.

So I'm pretty okay with paying taxes. I really don't get the simplistic thinking about taxes, saying that taxes are a burden... without any appreciation in what we receive out of our common efforts and for our common good. Taxes are simply a part of being a functional nation.

 

[libertygarden]

Property taxes are the problem of the consumer not the producer. I don't like them, but I try to find as many legal ways to avoid them. Emphasis on legal: I don't want to end in club fed. Most of the tax code is written to avoid paying taxes. Get a good CPA and figure it out.

 

[Ouachita]

I'm careful to avoid using the word "avoid" when it comes to taxes. I prefer to utilize every avenue to reduce my tax liability

I don't want to join club fed either. Always subscribed to the idea that any club that would accept me as a member was likely a mess anyway.

 

[crossbreed]

It depends. Land appreciation while it does not generate cashflow can be leveraged. Since 2016 when I bought my acreage, my property has gone up in value 5 times, but since it's ag exempt, my property taxes are nothing. That's a lot better than any other investment in my portafolio. Plus, my little 62 acre ranch generates quite a bit of expenses on improvements that appreciate its value that go right against my real job income, so I don't send that much to Uncle Sugar every year. The cow sales are just the cherry on cake for me. Lastly, I have loads of fun. If I ever get tired of running a ranching operation, I can always lease or hay the property. Yes, land is not very liquid, but 1, it can be leveraged; 2, once ag exempt the taxes are nothing, and 3, it provides options like leasing or a fall back location if the city life becomes too unbearable.

You got to the right spot! I spend a day working in an office with a whole lot of folks who don't enjoy their jobs either. Difference is I head to the farm and peace and quiet to wind down and they go home in town and turn on a tv. We hunt, fish work cattle and take care of the farm. Kids and grandkids love to spend time and altogether it's priceless. There's my profit

 

[Silver]

It's not about what they bring it's about the inputs in them.

Wrong. It's about the difference between the two.

 

[Lee VanRoss]

If you had a 60 cow herd and sold 60 calves for $60,000 but had $30,000 in running cost, a $12,000 annual land payment, and a $18,000 annual payment on them did you make any money? If so how much, if not why?

"If you had a 60 cow herd and sold 60 calves for $60,000" Good grief!
Sometimes and old blog puts a different perspective on things.

 

[Lucky]

Is $60k for 60 hd good or bad? It was just an easy example

 

[Stocker Steve]

If you had a 60 cow herd and sold 60 calves for $60,000 but had $30,000 in running cost, a $12,000 annual land payment, and a $18,000 annual payment on them did you make any money? If so how much, if not why?

Maybe. You need to separate out different businesses to know.

- Your land business cost interest plus property taxes plus land maintenance less land rent income Land valuations went up 34% here last year - - so my guess is that land was very profitable!

- Your cattle business pays the going pasture rent to the land business. Here that is U$S 30 to 40 per acre per year. I don't know what your other cow overheads are - - but my guess is the cattle business had a loss last year...

 

[Lucky]

Maybe. You need to separate out different businesses to know.

- Your land business cost interest plus property taxes plus land maintenance less land rent income Land valuations went up 34% here last year - - so my guess is that land was very profitable!

- Your cattle business pays the going pasture rent to the land business. Here that is U$S 30 to 40 per acre per year. I don't know what your other cow overheads are - - but my guess is the cattle business had a loss last year...

Cattle were a liitle down last year but still profitable. Land is through the roof though. I'd say I gained a grand an acre I can't spend.

 

[Lee VanRoss]

So we had 60 cows have and raise 60 calves without any opens or death loss and we made a thousand dollars an acre that we can't spend?
How can we help you?

 

[Lucky]

So we had 60 cows have and raise 60 calves without any opens or death loss and we made a thousand dollars an acre that we can't spend?
How can we help you?

Ok I tried to make it easy but....lets make it 76 cows had 65 calves but 2 died the remaining 63 brought a grand each after you poked $125 per hd worth of feed in them. In my example I just added the feed into the running cost for the year. Yes, land has went from 2k an acre to $4-5k an acre in the last 3 yrs here. Not sure why it's still the same land in the same crappy county. It definitely looks good on the books but I was buying at 2k, at 4k I can't make it work for us. End of the day it's just another number.

Is a grand a hd a little or allot for weaned 16 month old calves? I don't know

 

[Stocker Steve]

Cattle were a liitle down last year but still profitable. Land is through the roof though. I'd say I gained a grand an acre I can't spend.

You just need to refinance so you can buy some high-priced registered cattle. Then you will be raking it in with both businesses.

 

[Lucky]

You just need to refinance so you can buy some high priced registered cattle. Then you will be raking it in.

No way, we like to keep it simple.

 

[Travlr]

Ok I tried to make it easy but....lets make it 76 cows had 65 calves but 2 died the remaining 63 brought a grand each after you poked $125 per hd worth of feed in them. In my example I just added the feed into the running cost for the year. Yes, land has went from 2k an acre to $4-5k an acre in the last 3 yrs here. Not sure why it's still the same land in the same crappy county. It definitely looks good on the books but I was buying at 2k, at 4k I can't make it work for us. End of the day it's just another number.

Is a grand a hd a little or allot for weaned 16 month old calves? I don't know

Are they Corriente crossed with black Angus bulls? If so you'll get a premium even though they are the size of large jack rabbits and won't get much bigger. Of course if they are high quality red Angus, Sim, Limo, Gelb, whatever, they won't be worth as much. So let's have it... what kind of calves do you sell?

Just kidding. I see your point regardless of the numbers being used.

 

[farmerjan]

Between our own weaned calves, and some bought (cheaply) bull calves we worked, made into steers; and put together some groups.... Son figured he had 1.80/lb in the steers.... purchase costs, value of our own at the average of what they were worth when he was making up the groups, feed, mineral, vacc, etc..... One group of 23 brought 2.54, a group of 7 brought 1.83 and a few singles brought an average of 2.10.... so yes, he made money over and beyond what he had in them. The 23 hit a homerun... BUT it was in the "buying" where he brought down the average "cost" of them.

edited... the group of 23 avgd 561 lbs so they brought in $1400....

 

[Lucky]

Are they Corriente crossed with black Angus bulls? If so you'll get a premium even though they are the size of large jack rabbits and won't get much bigger. Of course if they are high quality red Angus, Sim, Limo, Gelb, whatever, they won't be worth as much. So let's have it... what kind of calves do you sell?

Just kidding. I see your point regardless of the numbers being used.

We have balck Angus based cows, nothing fancy. We run Hereford or Angus bulls. Bulls are registered and we try to buy nice ones but they are nothing fancy, just using bulls. I'm skipping the whole Corriente fad .

I got you, it was a hypothetical question but you know how that goes on here.

 

[1982vett]

Down to the nut cuttin…2022 profit was $90 a calf sold. Was no 16 month old $1000 a head calves. Have had several 450 to 550 pounders break $1000 this year.

 

[Stocker Steve]

Down to the nut cuttin…2022 profit was $90 a calf sold. Was no 16 month old $1000 a head calves. Have had several 450 to 550 pounders break $1000 this year.

But how much did you make in the land business?