Is now the right time to sell the farm? If you are a landowner nearing or just past retirement age, this might be the perfect time to consider selling, said Bill Gaughan, local broker with Farmers National Company.
“Cropland prices are at historically high levels, and particularly for top quality land, prices seem to have stabilized,” he said. “Commodity prices are lower than in recent years and look to stay there for the immediate future. So with land prices high and farm income stagnant, many landowners are wondering if this might be the right time to sell.”
Landowners wanting to sell may have found themselves in an enviable position that only rarely comes along. Farmland itself remains an attractive long-term investment, so a landowner can still find interested buyers, particularly for top quality land. High cattle prices are currently driving pasture land prices up.
“So why might a landowner hesitate in selling the land?” Gaughan said. “Some reasons are emotional, they still enjoy farming, or they don’t want to give up the land. From a financial point of view the most often voiced concern is what will I do with the money if I do sell? Currently capital gains taxes, including federal, state and the Affordable Care Act Surtax may, for some sellers, be in the 30 percent category.”
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To help shed some light on these issues, Farmers National Company, the world’s largest farm management and farm real estate company, is sponsoring a seminar to help landowners understand their potential alternatives.
“Farmers National Company is not in the business of providing retirement investment advice, and we always encourage anyone to consult with their personal financial professionals before making any decisions,” Gaughan said. “But we thought it might be helpful to landowners considering selling to have access to some resources that might offer them some different perspectives on how to manage their post sale assets.”
The change in capital gains tax rates at the end of 2012 drove some landowners to consider selling their land before the current tax rates went into effect. Now that the new capital gains tax rate has been in effect for three years, some new strategies for managing tax liabilities may be of interest to landowners.
Farmers National Company, without endorsing or recommending any particular strategy, will hold this seminar with independent financial professionals who are not affiliated with Farmers National Company. Farmers National hopes that this will give landowners some new perspectives and ideas on how to most efficiently and economically manage the sale of the farm.
Some traditional strategies have included using a 1031 tax free exchange to acquire non-farm real estate, thus deferring capital gains taxes. In some cases, landowners consider selling the land on a contract basis, thus reducing their capital gains taxes. Sometimes a charitable remainder trust can be used. New strategies exist that allow a landowner to receive the assets of the sale over time at a reduced capital gains rate without having to finance the sale themselves.
While Farmers National Company does not recommend any particular strategy it felt that providing this information may be of value to landowners.
The seminar will be held in Overland Park from 2 to 4 p.m. Sept. 8. Seating is limited, so even though the seminar is free, attendees are asked to register. For location information and to register, visit www.KCLandSeminar.com, call Farmers National Company at 913-837-4665, or email WGaughan@FarmersNational.com. On the web you can visit www.FarmersNational.com/KC.
Farmers National Company is uniquely suited to assist any landowner considering selling their farm. Farmers National Company is the largest non-franchise land real estate company in the United States. As a result you get the full value of the entire company, not just that of a local franchisee. Farmers National has sold over $2.37 billion in rural real estate in the past five years. With over 200 agents across the country, Farmers National has an unmatched amount of expertise and assets to help a land owner realize the full value of the farm when it sells.
Since Farmers National Company is the world’s largest farm management company, it has access to investors and commercial buyers of farmland that are unavailable to traditional real estate companies. When you add to that the international clients that use Farmers National to acquire and manage agricultural assets, it becomes clear why no one matches Farmers National Company when it comes to the marketing of rural property.
Farmers National Company, an employee-owned company, has sold over 3,500 farms (over 1,100 at auction) during the last five years and currently manages more than 4,850 farms and ranches (2.1 million acres) in 24 states. Additional services provided by the company include auctions, appraisals, insurance, consultation services, oil and gas management, forest resource management, lake management, FNC Ag Stock, and a national hunting lease service. Visit the Farmers National Company website at www.FarmersNational.com.
Farmers National Company
Seminar: 2 to 4 p.m. Sept. 8 in Overland Park.