|
NEMO | jreiser are you replying to me? The point i'm making is just that. Most farmers are'nt gonna pay the taxes, they're gonna buy something so they don't have to! But then they don't have that big 'gift' for a down payment. When you buy land you are gonna pay at least another third of the purchase price in taxes. Example = 6000/ acre is more like 8000 to 9000/ acre after taxes. Whether you have saved the money or borrow it. Another example: 160 acres at 7000 an acre = 1,120,000. Suppose grampy gave you the 25% down payment if you could get a 6% 20 year note for the balance. You do, so now you have yourself a nice little 73,235(yep dollars) payment for the next 20 years. Well the first 5 to 6 years you mostly pay interest so things are rosy, then along about year 7 or 8 you start having some extra income show up on tax day you can't put your finger on. So tax man(or woman) says you better buy something to offset the taxes. You buy yourself a nice shiny piece of machinary and expense it out as fast as you can to save the taxes, but you forgot you put it on a seven year note. About three years into that you are out of depriciation. Now what? I need to buy more iron for taxes but I'm 12 years into this farm and the taxes on the back end are starten to kill me( prolly paying tax on about 50 to 60,000 pricipal by now). Can't buy more machinary cuz I'm still paying on the first piece, and to top it off I'm now paying taxes on the freakin machinary payment cuz i dont got no mo depriciation left! It takes awhile to go broke but it happens. Gonna be alot of 20 and 30 and 40 and 50 and 60sumthns get it or learn the hard way. Some of them for a 2nd time! | |
|
Land x and y generation
