Selling the farm

[crusher]

Getting near the end of my career and making arrangements to sell the farm. My plan is to sell the shares of the farm corp after doing a purification. Has anyone had success doing this?

[TOM4CWB]

Getting near the end of my career and making arrangements to sell the farm. My plan is to sell the shares of the farm corp after doing a purification. Has anyone had success doing this?

Merle Goode is the best resource to work this through with in our Experience.

Very practical and a farmer who has done many of these types of farm plans.

merlegood.grs... give me a call for his consulting bus contacts.

Cheers

[blackpowder]

Merle or Rob Strilchuk I have heard.
Am currently working with my local MNP and seem good.
It's all on you to start with.

If I may, what is a purification?

[crusher]

Purification: pull all non farming assets out to get to 90% farm related.

[Grahamp]

Talk to pros for sure MNP Merle Goode etc. I think the trouble you will have is it is good for you and not the purchaser. I doubt big investors want to buy farm shares when they want land and if a farmer is buying I don’t believe a share purchase can be used for a replacement purchase. Right off the bat you have eliminated investors and farmers who are selling land to buy your place. So you have shrunk your pool of purchasers to farmers who don’t have to sell anything to buy your place. If you find the one right person it will probably work great, but they might be tough to find.

[rodd]

Just a heads up. If you are in AgriStability and an operating farm corp buys your shares, then your AgStab margin will be combined with theirs. This could be a selling feature if you have a high margin. This is something that I don't think most accountants know. It will get to be known as more corps are merged.

[AllisWD45]

The time comes for everyone one way or the other for farm transition. From personal experience I agree with getting good advice from accountants and lawyers. We planned ahead for a few years and since we had no one wanting to take over we severed ties with the farm by selling out completely. In the end we were lucky in the way it sold with the buyers buying everything land machinery and livestock saving us the emotional grief of auction and dispersal sales and the farm is still more or less intact to this day.
What i want to mention has little to do with the financial side but more to do with the what next. You will quickly find you have less in common with people you have associated with all your life. The old saying that now i have time to do the things i always wanted to do. The transition to that may be tough if you have no plans.But the good news is in time there is a life after farming and it can be pretty good if you let it.
I would like to mention that in the transition and to this day i am thankful for this forum as it is my window to the world of farming as it is now. Some of the topics on here are a pain in the ass but i just tend to skim over them as those arguments are never ending and the same people go on and on.
Good luck with your future plans.

[TOM4CWB]

Talk to pros for sure MNP Merle Goode etc. I think the trouble you will have is it is good for you and not the purchaser. I doubt big investors want to buy farm shares when they want land and if a farmer is buying I don’t believe a share purchase can be used for a replacement purchase. Right off the bat you have eliminated investors and farmers who are selling land to buy your place. So you have shrunk your pool of purchasers to farmers who don’t have to sell anything to buy your place. If you find the one right person it will probably work great, but they might be tough to find.

In discussions with Merle, he has observed a number of farm transitions and liquidations in the past few years... and has indicated positive outcomes... he is quick to pick up your direction; a 'wise' resource to add to your team who adds value.

Cheers

[crusher]

Wiseguy,

Just trying to minimize the amount sent off to the tax man at the end of the day. On our little operation, could amount to over $200,000.

[Rob.Strilchuk]

Talk to pros for sure MNP Merle Goode etc. I think the trouble you will have is it is good for you and not the purchaser. I doubt big investors want to buy farm shares when they want land and if a farmer is buying I don’t believe a share purchase can be used for a replacement purchase. Right off the bat you have eliminated investors and farmers who are selling land to buy your place. So you have shrunk your pool of purchasers to farmers who don’t have to sell anything to buy your place. If you find the one right person it will probably work great, but they might be tough to find.

If the purchaser is a corp and done properly, the purchaser can buy shares, and the cost base in the shares can be attached to the land on a wind up and bump. Complex but beneficial to both sides. Also, many "combos" done where sell part of assets and then purify (remove cash) and then sell shares. Call me if you wish to discuss further. Rob

[Rob.Strilchuk]

Selling shares purification ?

Sounds like your doing more scamming than Farming !

No scamming, just following the rules available to anyone that is using a corp. A purification now is effectively dealing with what you did not take out of the company and pay personal tax on previously.

[AlbertaFarmer5]

Interesting and relevant topic.
I have a neighbor who is at or well past retirement age, but can't/won't sell land because he is mad at an accountant who put all of his land into a corporation, and now he can't get it out to sell without the big tax bill. We are also incorporated, with the bare minimum amount of land inside the corp, just enough to cover the debt and then whatever we have bought since then, and would jump at the chance to buy some of his land. I am fine with putting additional new land into the corp, to make the principle payments with after tax dollars at corporate rates rather than personal. Personal capital gains would be far exceeded anyways, so that is not a valid reason to keep new land out.

I've been wondering if buying their shares would be in any way advantageous to his tax situation. This thread makes it sound like it would be. How is that advantageous? Is it pursuing this with a good accountant, or would it be a zero sum game at the end?

[shtferbrains]

They already spent what you do send.

[fjlip]

They already spent what you do send.

what you and every Canadian WILL SEND as long as we live.