Category: Farm

A group of researchers at the conducted a study to find out what vacant farm buildings can garner if rented out for other uses. The survey indicates that vacant ranch and farm buildings may be utilized to generate additional income to the land owner.

Vacant dairy barns could be rented to an aspiring dairy farmer. Smaller vacant buildings could be rented for storage of RV’s, boats, or other items.

To read more about the report visit this article at Farmanddairy.com. Or read the survey itself NCFMEC-Farm Building Rental Rate Survey.

The Washington Post has written an article about the ongoing California drought.  The article details the struggles of farmers and ranchers throughout the state.

Now, across California’s vital agricultural belt, nervousness over the state’s epic drought has given way to alarm. Streams and lakes have long since shriveled up in many parts of the state, and now the aquifers — always a backup source during the region’s periodic droughts — are being pumped away at rates that scientists say are both historic and unsustainable.

How has the drought affected you? Is it going to affect the way you run your property?

Uncle Sam likes to extract his pound of flesh from savvy business owners that have invested wisely and seen their investments grow over time. This tax is called the capital gains tax. If you own a piece of property and the value of that property increases while you own it, the IRS is going to tax you on the increase in value when you sell the property.

The effect of this tax can significantly damage the returns of an investor over a long period of time.

Defer Capital Gains Tax

Thankfully, if you own a farm, ranch, or vineyard as an investment and are thinking of selling, you may be able to defer capital gains tax through what is known as a 1031 exchange.  The IRS code allows for the exchange or substitution of investment or business property for another investment or business property.

This is done through the use of an exchange accommodator and is subject to a number of timelines and rules.

One such accomodator is First American Exchange. They have written an article on 1031 Exchanges for farms & ranches.

If you are considering selling your property, make sure you sit down with an experienced agent that can guide you through the 1031 exchange process and knows the importance of meeting the IRS guidelines.