Business, Economics, and Taxes: Capitalism. Yay? >=(

[The Sicatoka]

Which means your uncle had amassed over $10,000,000 worth of land, equipment, and other property at the time of his death. No offense, but I'm not feeling sorry for them.

At $6k/acre of farm land, $10M is just over 10 quarters of land. That's really not a big farm around here. (Yes, it's different, smaller, in Iowa, but even larger in Canada.)

Look at it another way: A combine (grain harvester) can go north of $500k. A tractor? Easy to get to $400k. And that's before you've put a header on the combine or an implement behind the tractor. You want to plant seed you say? A ten year old air seeder is over $80k. Again, you have no tillage equipment yet. And you want to park it somewhere ... like a farm yard building? And you need grain storage? Oh, and you might need a house to live in.

Farmers' finances run a "zero" beyond the rest of us ($10M to them is $1M to W-2 worker).

That's why I view inheritance, especially on true family farms, differently.


Closing thought: Farm land is the basis, the core capability, to operate the farm. Take away some of the land and the farm (the balance sheet) may become no longer viable. It'd be like taking away a Uber driver's car.

 

[LynahFan]

So sell the farm in toto (still viable), transfer the cash to the next generation, and they’ll have plenty of cash to pay the tax.

Next problem?

 

[unofan]

At $6k/acre of farm land, $10M is just over 10 quarters of land. That's really not a big farm around here. (Yes, it's different, smaller, in Iowa, but even larger in Canada.)

Look at it another way: A combine (grain harvester) can go north of $500k. A tractor? Easy to get to $400k. And that's before you've put a header on the combine or an implement behind the tractor. You want to plant seed you say? A ten year old air seeder is over $80k. Again, you have no tillage equipment yet. And you want to park it somewhere ... like a farm yard building? And you need grain storage? Oh, and you might need a house to live in.

Farmers' finances run a "zero" beyond the rest of us ($10M to them is $1M to W-2 worker).

That's why I view inheritance, especially on true family farms, differently.


Closing thought: Farm land is the basis, the core capability, to operate the farm. Take away some of the land and the farm (the balance sheet) may become no longer viable. It'd be like taking away a Uber driver's car.

Boo farking hoo. There's no reason your cousins deserve a free handout more than Shaq's kids just because your uncle was a farmer while Shaq was an NBA superstar.

Estates are based on assets minus liabilities. Which means your uncle had at least $10 million clear of any underlying mortgages, installments to John Deere, liabilities to Monsanto, etc.

 

[Deutsche Gopher Fan]

Farmers are real Muricans tho

 

[dxmnkd316]

Boo farking hoo. There's no reason your cousins deserve a free handout more than Shaq's kids just because your uncle was a farmer while Shaq was an NBA superstar.

Estates are based on assets minus liabilities. Which means your uncle had at least $10 million clear of any underlying mortgages, installments to John Deere, liabilities to Monsanto, etc.

Exactly. I don't know how Sic doesn't understand this very basic point.

Aside, many (most??) farms sell the Deere's after a year or two anyways. You want the guarantee they'll run or Deere will fix it within 24 hours. Guaranteed. So you generally only get that on the first year, maybe two. A friend was saying Deere is experimenting with extending that for a fee.

 

[Kepler]

Farmers are real Muricans tho

Except the ones in the Black Belt.

 

[LynahFan]

Aside, many (most??) farms sell the Deere's after a year or two anyways. You want the guarantee they'll run or Deere will fix it within 24 hours. Guaranteed. So you generally only get that on the first year, maybe two. A friend was saying Deere is experimenting with extending that for a fee.

So it doesn’t change the fact that Sic is an idiot, but this aside can’t literally be true. If half the farms sell after 2 years and tractors’ have an economically viable life of 10 years (probably conservative), then after 10 years there would be 2.5x as many tractors as are actually needed. So who’s buying all those used tractors?

 

[dxmnkd316]

So it doesn’t change the fact that Sic is an idiot, but this aside can’t literally be true. If half the farms sell after 2 years and tractors’ have an economically viable life of 10 years (probably conservative), then after 10 years there would be 2.5x as many tractors as are actually needed. So who’s buying all those used tractors?

Perhaps it's the large farms that do this. The way it was presented to me was this behavior is common.

 

[LynahFan]

Perhaps it's the large farms that do this. The way it was presented to me was this behavior is common.

Perhaps is was: most new tractors are sold within 2 years. That is easily believable.

 

[rufus]

Exactly. I don't know how Sic doesn't understand this very basic point.

Aside, many (most??) farms sell the Deere's after a year or two anyways. You want the guarantee they'll run or Deere will fix it within 24 hours. Guaranteed. So you generally only get that on the first year, maybe two. A friend was saying Deere is experimenting with extending that for a fee.

Oh, he understands.

But "it just ain't fair".

Whiney-ass tittie babies.

 

[aparch]

Exactly. I don't know how Sic doesn't understand this very basic point.

Aside, many (most??) farms sell the Deere's after a year or two anyways. You want the guarantee they'll run or Deere will fix it within 24 hours. Guaranteed. So you generally only get that on the first year, maybe two. A friend was saying Deere is experimenting with extending that for a fee.

Deere also is fighting to prevent right-to-repair because they want the farmers to shell out more money for parts and services provided only by John Deere instead of just allowing farmers the ability to fix it themselves. That is also playing into the lease vs purchase of John Deere equipment.

 

[SJHovey]

Deere also is fighting to prevent right-to-repair because they want the farmers to shell out more money for parts and services provided only by John Deere instead of just allowing farmers the ability to fix it themselves. That is also playing into the lease vs purchase of John Deere equipment.

The right to repair issue is a big one for farmers. Pretty much every farmer I've ever known has believed that he can fix pretty much anything, which explains why it's so rare to find a farmer with a full set of fingers. Farm equipment auctions are crazy, and in many ways the repair issue is making a good used tractor much more valuable than a brand new one.

 

[Kepler]

Deere also is fighting to prevent right-to-repair because they want the farmers to shell out more money for parts and services provided only by John Deere instead of just allowing farmers the ability to fix it themselves. That is also playing into the lease vs purchase of John Deere equipment.

This is the same sh-t that caused the farmers' revolt in the 30s: then it was the banks, now it's the manufacturers who are probably owned by the banks.

All these problems go away if we shoot about 5000 families into the Sun.

 

[The Sicatoka]

Aside, many (most??) farms sell the Deere's after a year or two anyways.

The ones that haven't incorporated the family farm and gone to leasing the equipment.

 

[The Sicatoka]

Boo farking hoo.

Sound basis for tax policy.


Mine is: If you own an asset (legally) and die, you should be able to call out a displacement (per will) of the asset to another with no tax liability on that transaction (because you already paid the tax to possess it).

 

[The Sicatoka]

The right to repair issue is a big one for farmers. Pretty much every farmer I've ever known has believed that he can fix pretty much anything, which explains why it's so rare to find a farmer with a full set of fingers. Farm equipment auctions are crazy, and in many ways the repair issue is making a good used tractor much more valuable than a brand new one.

Son (calling his dad, my cousin): "Dad, the auto-steer went out on the Deere. What do I do?"
Dad: "Steer."

Had to wipe soda from the inside of the windshield.

 

[Jimjamesak]

Sound basis for tax policy.


Mine is: If you own an asset (legally) and die, you should be able to call out a displacement (per will) of the asset to another with no tax liability on that transaction (because you already paid the tax to possess it).

When you die, you're not paying a tax on it.

 

[rufus]

When you die, you're not paying a tax on it.

Someone else is paying a tax on new income to them in order to possess it.

 

[rufus]

When you die, you're not paying a tax on it.

Someone else is paying a tax on their new income in order to possess it.

 

[Jimjamesak]

Someone else is paying a tax on new income to them in order to possess it.