Land rent

[blackpowder]

Many reasons out there. No clue what would pass close inspection. Over the years saw a lot of different combos.
And bs and hassle. No one was audited so I dunno. Today, rule of thumb, if Ll has tax problems or multiple income streams, we sell grain in their name. Cash Lls seem to be the ones who survived never leaving the farm. See the pattern?

Who knows where capital gain rules are going? Farmer status always seemed a little sadistic to me anyway.

Here, #cos have farm land rental income taxed at 46%.

[Quadtrack]

Gotta agree with 550. If he wants farmer status, keep farming himself. If he wants rent, then cash rent. Unless you are taking the risk and doing the work, you are not a farmer.
We did this 'custom work' rent bs for a guy once. Was not worth the hassle. And the very few breaks we do get as primary producers are more difficult to justify if they get abused.

[bgmb]

Gotta agree with 550. If he wants farmer status, keep farming himself. If he wants rent, then cash rent. Unless you are taking the risk and doing the work, you are not a farmer.
We did this 'custom work' rent bs for a guy once. Was not worth the hassle. And the very few breaks we do get as primary producers are more difficult to justify if they get abused.

Totally agree, but lots of ppl do it. Can be a win win in certain situations. Sometimes a guy needs to keep farming for a few years to sell of grain and machinery

[rockpile]

If you retire but cash rent your land, if you haven't used up your capital gains exemption then the cra still calls you a farmer. Not really your choice.

[sumdumguy]

I don't know if CRA has changed their stance on capital gains exemption, but in the past the capital gains exemption on your farm sale only applied to farmer and spouse who were farmers, so if you cash rented you may not qualify. Best to check with an accountant on that matter for sure.

[bgmb]

I don't know if CRA has changed their stance on capital gains exemption, but in the past the capital gains exemption on your farm sale only applied to farmer and spouse who were farmers, so if you cash rented you may not qualify. Best to check with an accountant on that matter for sure.

If you retire and cash rent your corporate owned land to non family get ready for a massive tax bill unless you can keep farming on paper

[Richard5]

Bgmb

Its actually more or less the same tax at the end of the day. With corporate land you would have take enough dividends so that if flows through to the shareholders.

leaving it in the company would cause high rate tax (46.6%) initially until someday when you pay dividends out.

In my opinion, if they want to remain a farmer keep farming. I would never entertain an arrangement unless the retired farmer was maybe going to work my operation for a T4's wage. That way he would see the costs and maybe put effort in the working for me.

My two cents are as follows:

In one post, the $120,000 and $60,000 would not qualify as an eligible farmer as the crop produced doesn't vary or show risk. Just because someone is doing doesn't make it right.

If a farmer wishes to go here then all of the production off the land would need to be reported on the landowners name. He then in turn has the be invoiced the applicable direct costs plus the custom rates for the service.

[food4u]

just remember that farm insurance policies frown on custom work and DOT doesn't like you hauling someone elses grain on a farm plate.

[bgmb]

Bgmb

Its actually more or less the same tax at the end of the day. With corporate land you would have take enough dividends so that if flows through to the shareholders.

leaving it in the company would cause high rate tax (46.6%) initially until someday when you pay dividends out.

In my opinion, if they want to remain a farmer keep farming. I would never entertain an arrangement unless the retired farmer was maybe going to work my operation for a T4's wage. That way he would see the costs and maybe put effort in the working for me.

My two cents are as follows:

In one post, the $120,000 and $60,000 would not qualify as an eligible farmer as the crop produced doesn't vary or show risk. Just because someone is doing doesn't make it right.

If a farmer wishes to go here then all of the production off the land would need to be reported on the landowners name. He then in turn has the be invoiced the applicable direct costs plus the custom rates for the service.

Grey area. If you have costs and you are selling grain and have some variability in my mind you are a farmer I think that would be legit.

[Partners]

The big thing for farm status was the cheaper fuel..now that is gonzo..

[danny W1M]

If land is $180,000/150Ac cultivated, what should cash rent be? I'm thinkin' around $60./Ac


Does that sound, too low? too high? about right?

[bgmb]

If land is $180,000/150Ac cultivated, what should cash rent be? I'm thinkin' around $60./Ac


Does that sound, too low? too high? about right?

In mb land rent is 2-3 percent of value pretty. Sask might be a bit higher?

[blackpowder]

Its pushing 2-3% here but I dont believe long term sustainable based on $4500/ac land.

[farmaholic]

$4500/ac? $720,000/quarter? 3% is $135/ac. If you wanted to buy some, what could you possibly grow to make payments on that. And I thought things were stupid here! WTF...is it in the golden horseshoe of Alberta? Long past agricultural value. I guess everything is relative....and that's relatively crazy!

...farming little league here in the slum of the Ghetto, and only growing sour g****s! For my bitter whine.

[Ronski]

% of land value is shit. It has to be % of crop potential. Land here (Lacombe, Blackfalds) is/has traded in the 6500-8000/ac range. 1/2 section a mile west with no residence and old 40 year old wooden bins and an aircraft hanger (older) and runway went for 1.2 million, each quarter.
These numbers are based on needing land for manure spreading, or development potential not farming income.
% doesn't work.