WHO GETS YOUR LAND?

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.”

 

WANT TO SAVE MONEY?

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.