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. Cropland prices are near historically high levels, and particularly for top quality land, prices seem to have stabilized for the moment.
Commodity prices are lower than in recent years and look to stay there for the immediate future. So with land prices high but wavering, while farm income remains stagnant, yet with interest rates still at historic lows 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 that is not subject to some of the risks inherent in the stock market. So a landowner can still find interested buyers, particularly for top quality land.
So why might a landowner hesitate in selling 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.
Local broker Bill Gaughan said, “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. 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.”
Farmers National Company will hold this seminar featuring independent legal and financial professionals who are not affiliated with Farmers National Company. Farmers National Company hopes that this will give landowners some new perspectives and ideas on how to most efficiently and economically capitalize on the potential sale of the farm.
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 have been in effect for three years , some new strategies for managing tax liabilities may be of interest to landowners.
Some traditional strategies have included using a 1031 tax free exchange to acquire nonfarm 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. To assist landowners considering selling their farms, speakers from a financial services firm that specializes in managing post sale assets will be available to offer advice and answer questions.
As important as the actual investment decisions made after the sale of the farm might be the legal structure used to protect the proceeds. Should a trust be utilized? If so what kind of trust? Instead maybe an LLC is the right instrument. The seminar will be featuring speakers from a law firm that specializes in just these kinds of questions and will be offering options and answering questions for interested landowners.
The seminar will be held on June 7 from 2 to 3:30 in the afternoon. 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 world’s largest farm management company and as a result they have 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 Company it becomes clear why no one matches Farmers National Company when it comes to the marketing of rural property.
Farmers National 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
On the web: www.FarmersNational.com