Bankruptcies of the 80s

[flea beetle]

The other scenario is hire a herd manager and start buying cows to offset income. You get to write off the wage for the guy managing the herd, plus write off the cost of the cows. I realize, that this is adding to the problem at the end, but so does incorporating?

Not a cow on the place at the moment. Just thinking outside the box?

Want to sell some cows woodland?

[Guest]

Incoporate .......ideally would of been a few years ago

[blackpowder]

Wow, this thread just went from business to pshycodelic fantasy.

[flea beetle]

Another tax deferral. You don't want to make money owning cattle? A one time fix.

The idea would be to keep buying more and hiring people to offset the tax. Eventually giving it to the kids for 25 cents on the dollar. They show more interest in animals than the grain/hay end. They would have served the purpose for me, and I get to give my kids the saved tax vs. to the government.

Although as I am writing this, I realize that they will eventually end up paying the piper anyway as they would have no cost base.

I don’t know...incorporation it is I guess!

[canolacrazy]

finally, a good discussion related to farming.
merle good says to think about incorporating and selling some of your land to the company to trigger the captial gains exemption for both mom and dad. he figures you can sell at a 30% premium to current market prices in order to maximize the sale and the government won't have an issue with it. take back an interest paying note from the company and have it paid off over time to manage personal tax. when trudeau decides to go reduce or take away the exemption it's already locked in.

[woodland]

The other scenario is hire a herd manager and start buying cows to offset income. You get to write off the wage for the guy managing the herd, plus write off the cost of the cows. I realize, that this is adding to the problem at the end, but so does incorporating?

Not a cow on the place at the moment. Just thinking outside the box?

Want to sell some cows woodland?

Our cattle marketing guy we deal with used to be in the Edmonton stockyards and he said they had millions of dollars of cattle bought “on paper” at Christmas and then magically sold the first week of January. Businesses and people not even connected to Ag were doing this. I agree though it is kicking the can down the road.

Cows should be cheaper this winter based on current barley (high) and calf (low) prices. Currently in expansion mode with cows here so none available. If bred heifers crack $3500 like the last cycle top call me up. Heck I’ll throw in delivery too😉

In all seriousness if you want cows .............. more importantly if the wife will allow you to have them............ it’s not a bad time to jump in. Just remember you can get calls from the neighbour when you’re about to sit down for your dad’s birthday supper (two weeks ago) to say there’s a bunch of yearlings in their yard because a beaver dropped a tree on a fence .............. I have yet to receive a call saying my barley is running down the road😉


P.S. I am biased. I love my cows.............. most of the time😎

[foragefarmer]

Flea

Lots of advice on here, not all good some good, but seriously you have to get a good accountant before doing anything regarding incorporating so you can put your mind at ease.

Getting advise on a farmer chat line is ok but you need a professional farm account who can explain everything to you when it comes to reducing tax issues and helping you in make the right decission

[jazz]

Flea there is a lot less risk storing cash then grains. The defering thing is kinda old school and I remember my dad and when I started out trying to duck and weave, defer and prebuy and eventually got caught anyway.

Incorporation is the only way. Then you can buy and sell anytime and you can set your corporate year against the calendar year and the crop and calf season to create max flexibility.

My accountant uses a rent back strategy of the company renting my personal land and that can really hammer down the income tax.

We also take a lot of personal income from stock dividends which are taxed very lightly. A good chunk of our personal taxation is property taxes, probably more than income taxes or equal.

6 figures to Trudeau? hell no. I would buy iron just to park before that would happen.

Also, the it is easy to add kids as share holders to a corporation and it can continue on after you are done. They can draw an income from it from any RE.

Also, I think if you do incorporate, you cant go to the local guy for accounting advice. Gotta go to the majors, KPMG, MNP. You accounting bill will triple but its worth it because those guys know every trick in the book because they have huge corp clients.

[Sodbuster]

Land rent works good for income, it’s rrsp eligible and don’t have to pay CPP or EI. When winding down dividends work good, that’s my plan and I’m sticking to it.

[Bowerpower]

I have a Corp and I’m still deferring