Edition #45

November 2, 2024

Good morning and welcome to the Braintrust Ag newsletter. Where we guide your ag business like the most advanced GPS system on the market…

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In a Glance…

• 🏛️ Big Idea → Agricultural Taxes

• 🌱 Seeds

• 🫂 Sibling Harmony

• 📅 Happenings

• ⚠️ CTA

• 💲 Exemption Updates

↑ Click the above links to jump to a section.

THE BIG IDEA - Pro Manager Series

The Basics on Farm & Ranch Taxes

As Founding Father Benjamin Franklin put it in 1789 (which still rings true today), “Nothing is certain except death and taxes.” This edition tackles the latter.

Farm taxes can be a handful, especially with federal, state, and local rules to keep track of. While it’s natural to focus on daily operations—tending to livestock, crops, and land—staying on top of taxes is just as crucial for keeping your ag operation running smoothly and successfully.

In our latest blog post, we break down the essential tax basics that every farmer and rancher should know. From property taxes to payroll and everything in between, you’ll get a clear picture of how to stay compliant without sacrificing your farm’s growth and financial health.

Click the link below to read the full piece ⤵️

If you don’t want to read the post, but still want to download the quick guide to farm and ranch taxes, click the button below:

Seeds

• 🐮 Cull Cows: There’s a comprehensive guide available for cattle producers designed to maximize the value of their cull cows. Here’s the article with a link to the guide.

• 🎓 Scholarship: Pass this along to high school students in your circle: there’s a $7,000 Soy Scholarship opportunity for high school seniors looking to pursue agriculture. It comes from the American Soybean Association with grant money from BASF.

• 🚜 Used Equipment: Machinery Pete did a little digging into his vast amounts of data to compare the 2023 and 2024 prices of used row crop tractors. The result: down around 34% on some specific models. Here’s the piece with more info.

• 📉 Land Trends: If you’re curious about the farm land values being seen at recent sales, this article breaks down prices in IL, IN, KS, KY, NE, MN, and SD.

• 🧑‍🤝‍🧑 Dream Team: This column highlights the importance of, and who to include, as an advisor to your ag operation. I wholeheartedly agree that some type of advisory board ought to be considered no matter the size of the operation.

Sibling Harmony

Non-greedy siblings who get along is a beautiful thing to see.

Twenty-some years ago, a brother and sister inherited their family farm. The sister had moved three states away to start her own life after college, while the brother had stayed to work with Dad on the farm.

The inheritance was divided in a specific way: the brother received the home place with the bin site, the machine shed, and all the machinery, while both siblings shared ownership of the remaining farmland equally.

Each year since Dad passed and they had received their inheritance, brother would send sister a rent check for her share of the farmland, but she would simply shred it. She told him, "Dad wanted you to take over the farm, and I don’t need the money."

During this time, brother just went ahead and took care of the property taxes.

Recently, as part of the brother’s estate planning process, they undertook a land swap. Upon inheritance, they were tenants in common on all the land, and now after the swap they each own distinct parcels of land. The brother now owns the land surrounding the home place, while the sister has the land bordering town.

The division was based on equal dollar valuation which they both agreed to.

Now that the land has been separated, both sides’ future estate planning ought to be much cleaner. The highlight of working with them was there were zero fireworks or drama throughout the process.

Braintrust Ag Community Updates

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What’s Happening?

Upcoming Expert Q&A

Friday, Nov. 8 @ 8:00 am CST

If you don’t follow Jenny Rozelle online, you ought to. Or better yet get your questions answered directly next Friday!

Jenny is a Partner & Attorney at Indiana Estate and Elder Law and an absolute bank of knowledge when it comes to estate planning. It’s what she eats, breathes, and sleeps. And lucky us - she’s agreed to share some knowledge and answer estate planning questions we members have!

Here’s the link to the Event Post: 🔗 Expert Q&A Event

And click here to get CONTACT INFO for Jenny.

CTA

Please don’t forget to file if this applies to you…

Sometimes I feel like I’m beating a dead horse... but there's many folks with an LLC, corporation, limited partnership, or other entity who still don’t know they need to file a new report with the federal government.

So, here's a reminder: Initial BOIR filings are due 12/31/2024

This is just another one of those compliance things you’ll need to add to the list if you've got an ag operation utilizing an entity.

Below is a fact sheet I put together for this. You can read more about it and download a PDF version of the fact sheet here: 🔗 CTA Factsheet

Exemption Updates

New projections for 2025 Federal Estate & Gift Tax exemptions

Federal estate tax exemption:

Current: $13,610,000

2025 (projected): $13,990,000

Annual gift tax exemption:

Current: $18,000

2025: $19,000

*It's looking more likely there could be an estate tax cliff on January 1, 2026 where the estate tax exemption is dropped to ~$7 million.

So, 2025's higher exemption amounts ought to be used for estate planning. And, the gift tax exemption allows individuals to gift more tax-free each year without eating into their lifetime estate exclusion.

Meme of the Week

That’s a wrap, folks.

Until next time, thank you to everyone involved in ag.