|Written by Dr. Harold Wong|
Secret advanced tax strategies
I was invited to the annual AG Horizons Conference, held Dec. 3-4 in Pierre, S.D. Seven different small agricultural associations have their joint meeting. Of the three different talks to the group, this article will highlight some of the material from “Secret Advanced Tax Strategies.”
Farming has changed from when I was a kid, 60 years ago growing up on the outskirts of rural Joliet and Kankakee, both in Illinois. Then, many small-time farmers could support their families with a 160-320-acre farm and a part-time job during the winter. Today, farms are huge enterprises and some of the folks I met farm 3,000-10,000 acres. Machinery is costly, with combines costing $300,000 or more. So, one needs a lot of acres to amortize the high cost of machinery.
In the past five years, there have been record crop prices, reaching as high as $7 per bushel corn; $16 per bushel soybeans; and $10 per bushel wheat. With high crop prices and large farms operated, net profit from farming is no longer small potatoes. A number of the farmers have net profits of $250,000 to $1,500,000 in a good year. So, they now have more cashflow than ever and therefore tax problems. They also have the cash to do things for the family that were previously unheard of.
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