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Post by cptusa on Oct 8, 2023 14:15:27 GMT -6
I'm not sure on capital gains. I know there are several different brackets for it and you can use a 1031 exchange when selling and buying to eliminate or roll it, also get a stepped up basis on estates.
How to pay for it? Other land is of course subsidizing it but I've made a shit pot of money the last three years too, and my 140 feeder calves will dollar up great this year. Paid for hog barns are a cash cow and nearly eliminate my fertilizer bill on 3/4 my acres.
All that said if it wasn't adjoining I likely would not have done it.
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BJT
Full Member
Posts: 109 Likes: 40
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Post by BJT on Oct 9, 2023 9:07:35 GMT -6
Delage Farms is a family owned farm. And to really wow you guys, a women runs the day to day operation !
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Post by jcalder on Oct 10, 2023 6:26:53 GMT -6
People who complain about "corporate farms" just sound jealous to me.
There's nothing stopping any "family farm" from finding investors so they can grow if that's the path they want to go down.
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Post by slipclutch on Oct 10, 2023 6:57:07 GMT -6
If your farm is incorporated. You’re a corporate farm. Kinda makes sense. 🤷♂️
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BJT
Full Member
Posts: 109 Likes: 40
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Post by BJT on Oct 10, 2023 7:03:30 GMT -6
So a guy that farms 5 1/4s of land and has 60 cows, that uses a corporation for tax and succession planning, is a corporate farm ? Lol. No wonder hardly anyone uses these forums anymore. Lol you guys are laughable.
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Post by garyfunk on Oct 10, 2023 8:23:31 GMT -6
If your farm is incorporated. You’re a corporate farm. Kinda makes sense. 🤷♂️ That's us. 😅
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Post by kenmb on Oct 10, 2023 8:56:59 GMT -6
Yeah, even a guy with 3 quarters of land registered as a corporate farm is exactly what we mean when we talk of corporate farms.
And so when I mention One Earth Farms its goes completely over the head of some.
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Post by kevlar on Oct 10, 2023 10:02:21 GMT -6
I think the term corporate farm is used loosely, not just any farm that’s incorporated. Most guys I believe are referring to corporations or large companies outside of farming that buy up everything as an investment in the land itself, and only in the last number of years able to make enough profit actually farming to satisfy shareholders. I have no problem with farms that are incorporated, my brother and I are as well, my beef is with things like the pension firms as one example buying up all the land they can. For people looking to exit farming it’s good for them, but people wanting to expand with the next generation involved it’s basically putting a stop to it. Or like One Earth Farms was mentioned, they drive up the costs of everything then walk away from all their debts.
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Post by Oatking on Oct 10, 2023 10:15:26 GMT -6
I do think multi generation loans are in the cards in Canada very soon. However , I have not heard a bank yet approve that type of loan.
I am not jealous of a farm who can come along and make 8000 an acre work ! As a last generation farm owner , I want my land values to stay strong so when I rent my land out , I get a good retirement . My daughter are not interested in farming. Maybe the only thing I am jealous about is not having a son to follow in the foot steps. Even that scenario is not all that common anymore like it use to!
Only way to convince the banks of multi generation loans is to get a discussion going. Holy the interest collected would be crazy !
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Post by kevlar on Oct 10, 2023 11:09:43 GMT -6
How can multi generational loans even be legally possible? I know it’s done in Europe but look where that’s getting them. I don’t see it ending well if it goes that route.
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Post by cptusa on Oct 10, 2023 13:13:32 GMT -6
Oatking you may get a farming son in law!
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Post by kenmb on Oct 11, 2023 9:11:52 GMT -6
The basic idea of a multi generational loan seems absurd. But is suppose some people would actually take one out.
Debt is future spending brought to now. You are basically saying you don't want to wait to own something when you have the funds set aside, you want it now and will pay later. And when paying later you are paying off debt so can't buy other things.
Multi generational loan would mean you want it now and want to use it though you can't afford it, and will stick the bill with your kids.
Sure, one can say you are buying land or house and kids will get it once they have paid it off themselves but what kind of parent would make that decision to say what the kids will actually want. And 40 years is a long time and things can change, lots of changes here since 1980.
People have been accustomed to debt, so much so that many don't have savings. They have debt and they look to see if they are making payments on debt. If they are making payments then any left over is considered free money to be spent. Not everyone for sure but it is safe to say overall debt has gone up in recent years rather than down. Which would be inconsistent with how good we are told the economy is. A good economy should mean less debt and more savings.
Radio last week said house prices in Regina stopped going up. Many years since that scenario arose. Now we see if they hold steady, go up again, or go down. Keep in mind a house is real estate, so is commercial real estate also real estate, and farmland is real estate also. Yes, people like to seperate farm land from all other types of real estate and call it real estate "that is different", but farm land is still real estate. Especially when investors are involved.
As for commercial farms, One Earth couldn't get capital it needed and folded. Meaning investors were not investing. Ontario Teachers Pension Plan was buying farmland also and no longer is, has sold land in recent years. Broad Acre farms is another corporate farm now gone. Yes, you can get investors into your own farm and expand and grow and all is well. The trick is to not make your farm dependent on that extra investment because if those investors take away their capital then you have to replace it yourself. So you need to be prepared to do just that. And if you can't then it all goes.
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