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agr568
Friend

Re: advice from the older farmers

It seems we may be missing a bit of the backstory...farming for ten years and just bought, presumably, his first tractor!!!  Seems like good ol' dad may just be getting some overdue payback for 10 years of his machinery use.  However if Junior started from scratch with NO help from dad in the form of management, labor, equipment, infrastructure, cosigning etc. then by all means he should be reimbursed at full rate utilizing whatever annual equipment ownership schedule he deems appropriate.

 

A family farm needs to be a business first, otherwise it's likely to turn into a terribly expensive and oftentimes tumultuous hobby.  Any expansion, updating or new business enterprise needs to be discussed with ALL parties involved before any decisions/changes are made, even something as simple as equipment upgrades... we could all site examples of when good intentions have led to failure of catastrophic proportions, but that offers little to this specific situation.

 

On another note, I'm under the impression that machinery rent is non-taxable income; it is treated as a reimbursement not as income from labor or sale of a given product.

 

Just my 0.1714 lb of corn (that's $0.02 at local cash prices)

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Senior Advisor

Re: advice from the older farmers

I would assume that any income from machinery rent would indeed be taxable. Obviously the machine owner is already taking depreciation on the equipment and any income produced from renting would taxed.

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Contributor

Re: advice from the older farmers

I believe stated earlier, and if not, is not first tractor. 

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