When buying a farm property, there are several things you need to consider. These include taxes, ownership, value, and transfer. If you’re buying a farm as an investment, be sure to know all of the tax implications before purchasing the property. In addition, you should know how to transfer farm property and the proper legal documents to do so.
Ownership
According to the USDA, women are becoming more common among farm owners. They are now the principal operators of one in seven farms. Women are also more likely to own full ownership of the land they operate. While women still own fewer farms than men, a large share of women operate small-scale family farms. However, women are losing land as a result of urbanization and deforestation.
There are several legal structures available for transfer of farm property. One of the most common options is to incorporate. It is beneficial to incorporate as a corporation to protect your business. This structure allows you to transfer your property and earn income tax-free, which will lower your tax liability.
Value
In the early 1920s, the value of farm property was much higher than it is today. As the farm economy began to decline, the assessed valuation of farm land began to decline as well. However, the decline in the market value of farmland was not reflected in the assessment for several years. As a result, there was a delay between the assessment and the payment of taxes. This is because only about half of the States assess farm real estate annually, although it is usually a formal requirement.
This comparison involves sixteen states, and is summarized in Table 31. For each State, data from the census are available. Detailed analyses of these data are found in other parts of this bulletin.
Transfer
Transfer of farm property is an important aspect of estate planning. It involves the acquisition, protection, and disposition of assets. Transferring farm property in Oklahoma presents a variety of challenges, and more farm families are learning about the importance of a sound estate plan. This publication aims to present basic information about these issues, point out possible solutions, and encourage families to create an appropriate plan. The primary goal is to minimize the costs of the transfer, including tax losses and probate expenses.
If you are planning to transfer farm property to your child, consider transferring it on a tax-deferred basis. This can allow your child to step up their cost base. It is important to remember that, in some cases, a parent can trigger a gain in his or her own hands even if the child will be able to take advantage of a capital gains deduction or unused losses. In these cases, the parent will set the proceeds in the appropriate range for the intended gain.
Taxation
There are several factors to consider when comparing the taxes and income from farm property. The first is the amount of income generated on the farm. Some farms generate large amounts of income through rented farmland. In such cases, the income generated from the farmland will be greater than the taxes paid. However, this distinction must be made with appropriate qualification.
The next consideration is the type of taxation. In most states, farmland is subject to state inheritance taxes. This is not the case in all counties. In California, the farmland tax accounts for approximately 4 percent of the total tax expenditure.
Insurance
Insurance for farm property protects the land and other buildings that are a part of the farming operation. A policy covers damages caused by vehicles, aircraft, and farming equipment. It also covers losses caused by criminal acts committed by others. Some of the things that can cause damage to farm property include earthquakes, fire, lightning, vandalism, and electrocution.
Personal property is another type of property covered by farm insurance. This type of insurance covers any items stored in your home or outbuildings, as well as livestock and other animals. Some policies even cover computer equipment and GPS systems that you use to run your farm.
