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SW KS, near Dodge City | Be the first generation to put the farm into the corporation? I understand the taxed-based reasoning for a corporation to not own land but here's how I would approach it, assuming I actually had enough to worry about...
Put the ground, machinery, etc... into the corporation. The family member(s) that farm are salaried employees, with bonuses in the form of stock options. Corporation retains earnings & obtains financing as any other industry corporation would to purchase land (which could easily be viewed as the production factory, just like the tractor works at JD). Individuals own the shares in the corporation. Individual is then responsible for themselves, while the corporation is responsible for itself. IE, the individual uses the salary to build retirement, augmented by dividends, while the corp is responsible for land purchases, capital investment, pension funds, etc...
Obviously, it would take a fairly well-heeled individual to start this, but once established, it would run in perpetuity. I'll admit I'm not all that well-versed on the tax-code implications of doing this, but it would seem to eliminate a lot of these issues.
And to Plowboy, that way once you're older & have no heirs coming back, you just hire an outside farm manager that is responsible for the corporation. You and your brothers are the board of directors that the mgr answers to, and the business now has an endless horizon. Then if your heirs want to, they can sell the shares to cash in on your hard work. Or would it be cash out?
Best success story I can think of right off hand is Irsik & Doll in cattle feeding/elevator ownership. | |
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"Long run" and the life of an operation
