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Advisor

Re: 1200 dollar rent

This escapes me???? Maybe a rumor myth or legend, but why not just buy it? the payments would be less than $400/acre. Jr. I've heard the same thing going around our area. It's not me, either!

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Advisor

Re: 1200 dollar rent

I think you are still missing a beat in the picture?

The rental income omeny still has to be dealt with as unearned income in the year it's received. 

Whatever he has LEFT after taxes could be invested and would then  be subject to capital gains taxes when sold. 

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Veteran Contributor

Re: 1200 dollar rent

If 3 yrs of rent were pd in full of Feb of yr 1, the letter or escrow  wouldn't be needed. I didn't know a tenant like that existed. 

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Senior Contributor

Re: 1200 dollar rent wave of the future

I believe this will become very common. The big guys have so much cash on hand at this point, that they probably aren't borrowing much and it's a great way to secure ground for the next three years.

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Senior Advisor

Re: 1200 dollar rent wave of the future

Yup! swimming in money and looking for a deduct. Deduct now and forward contract for the long term.  I've never done that but have seen the time when I would have liked to paid rent in advance. Not 1200 per acre but a year in advance.

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Veteran Advisor

Re: 1200 dollar rent tax implications

Have been trying to work this out in my mind.

I am not a tax expert but if I recieved all the income now I would be taxed on it now. As you note Pupdaddy it would be at a high rate.

Now there would be expenses that could be deducted against this like taxes maybe insurance and in some years around here drainage maintenance costs.

Next year the landlord would not have this income except interest on the money that he/she wisely invested.

Think there could be tax benefits to this and tax detriments, would have to run it by an accountant to know if it ws good or bad here. 

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Senior Advisor

Re: 1200 dollar rent tax implications

The guy renting wants to expense it in 2011 having extra cash on hand himself and securing the rental for 2 more years---guess that would be a hedge ??

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Veteran Advisor

Re: 1200 dollar rent tax implications

There is a farm rented near me for 10 years starting with 2011 season.

Do not know all the details but the renter tiled the farm last fall and has a contract to rent the land for 10 years for ?? $250/ha or $100/ac in that measure according to rumours.

Not sure what cost of drainage is now but would need a spread sheet to calculate all the plusses and minus on that one. 

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Frequent Contributor

Re: 1200 dollar rent

I'm no tax man but, if land is owned in a corporation could it income average over 3 yrs? If owned as individual and rent recieved annually

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Frequent Contributor

Re: 1200 dollar rent

I better finish. If land is owned as indiviual and reported annually, that would be a lot of low tax braket savings. What kind of investment could make up for that. Thats what I want to know.

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