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HOW DO I SELECT THE
RIGHT FARM OPERATOR? |
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The first decision when selecting an operator for your farm is: which lease type fits you and your farm?
Do you want maximum returns with more potential risks (custom farming)? Do you prefer minimal risk and involvement
with the farm operation (cash rent)? Or perhaps you want to give a young farmer a break by leasing your farm on a
crop share lease? From an owners standpoint multi-year leases should be avoided for three reasons:
1. Rental rates can increase substantially,
2. Full possession (without a lease) works best when selling the farm.
3. The ultimate motivation for a non-performing tenant is to terminate the lease.
I have been matching farms with the “right operator” since 1973. There have always been a significant number of
operators to choose from. I like to match no-till farms with people that have been successful with no-till. I observe
what the potential operator’s farmland and machinery look like. Do they have “pride of ownership?” How does their weed
and brush control look? The amount of machinery and labor available should also be considered. More land to farm is important
when a father is trying to bring a member of the next generation into the operation. This can present an opportunity for the landowner.
Above all else, select an operator that you trust and enjoy working with.
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WHO GETS YOUR
LAND? |
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Transferring land between generations needs advance
planning. As the owner of the land, you can accomplish
several things when transferring land to the next
generation:
1. passing on the family heritage,
2. minimizing taxes,
3. determine the most capable heirs, and
4. influence the use of income earned.
Both the legal and accounting professions can be very
helpful in the transfer. Farm managers have also been used
to establish maximum net returns, determine equitable splits
of farmland between the heirs, providing ongoing management
to minimize conflicts between heirs, and used as a resource
to bring non-farming heirs “up-to-speed.”
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WANT TO SAVE
MONEY? |
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How about renting your farm to a person who qualifies as a
beginning farmer? Starting January 1, 2007, the Iowa
Agricultural Development Authority has an Iowa tax credit
for you if:
▫ You are the owner of Iowa farmland that does not violate
the Iowa anti-corporate farming laws.
▫ Eligible tax payers can be related and it is available to
individuals and corporations.
▫ The asset transfer (lease) must be for a minimum of two
years.
▫ The tax credit certificate (toward your State of Iowa tax
bill) will be issued in the tax payer’s name in the amount
of 5% of the cash rent lease per year.
Who is a beginning farmer? Anyone with less than $300,000
net worth, at least 18 years old and has sufficient skill to
actively operate the farm.
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WE HAVE
CLIENTS
WHO WANT TO BUY... |
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- We have clients who would like to buy:
• 40 acres of timber/pastureland.
• 300+ acres of cropland pasture and home.
• 400 acres of continuous hunting ground.
• 160+ acres of cropland, South ½ of Page County, Iowa.
• 40 acres of rough land on a paved road.
• 5-40 acres of pastureland and some timber.
• 40-160 acres of CRP and some timber.
• 40-160 acres of cropland, 50-65 CSR.
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