RIP

[TOM4CWB]

What a huge 'bubble' is forming in farm equip. Machine Co's are dummping the liability on dealers.

When this pops... I would want to be well clear of the mess!

Unless they keep up the tax credits indefinately???

[Hopperbin]

Tom is Tax Credit and depresiation deduction the same animal? Or totally different, if different then farmers are paid entirely by the gov't to purchase equiptment. Tax credit must be just an earlier form of depreciation. That is tax credit should be deduction from the future depreciation. This is my view, not proven, so is a question.

[TOM4CWB]

Hopper,

Say you start with a machine with $100K purchase price.

A 50 percent writdown the first year would mean $50K off the taxable income of the buyer.

Tax credits usually pay in lieu of actual cash payable on taxable income.

If some folks have written down their undepreciated Capital Cost allowance to zero already... then only the difference amount would go against income that tax year re: depreciation.

A Tax Credit does not have this restriction... it just lowers the tax payable on that reporting year.

[farmaholic]

Quote:

These new super dealers just took away competion. Some just don't get that.

Interesting concept how it seems to work for everyone but primary producers.

[Hopperbin]

Not sure I agree with the taking away the competition. As a farmer and a buyer of used equiptment I am the one who decides to sign the check. Dealer gives me a price and a sometimes stale coffee. Yet I have the power to sign the check , no one forces me.

[fjlip]

If one year multiple deal traders pay more difference, us used buyers will get a cheaper deal!
Thanks guys for eating the depreciation and taking all the bugs out in the first few years!
I'd like to know how that pencils out?

[farmaholic]

It all boils down to cost per acre, if it works for the guy, so be it. Warranty is nice but in my opinion is well paid for!!!

[hobbyfrmr]

fjlip, good point. I like buying older machines with the bugs worked out of them. I also agree with the others that it boils down to cost per acre to get harvesting done in a timely manner. My neighbor had 14 deeres this season, for a perspective, he throws out more grain than I harvest in one season. He also harvested millions of bushels more than I did!