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USA | Boone & Crockett - 12/24/2024 20:23
coup - 12/24/2024 20:21
Boone & Crockett - 12/24/2024 18:51
coup - 12/24/2024 19:43
Boone & Crockett - 12/24/2024 18:36
coup - 12/24/2024 19:31
Boone & Crockett - 12/24/2024 18:21
ricefarmer14 - 12/24/2024 19:05
Hey Coup, I’ve read enough of your posts to know you run some older equipment (a nice stuff that gets job done) as do I…talking to accountant my depreciation is running out but so is my equipment debt.
I’ve really enjoyed paying little in taxes over the years and it’s nice to have close to no equipment debt but how should one handle this situation? Don’t really want to buy more to just get more depreciation… Well, depending on your income, you could pay yourself up 400 grand and deduct it. No equipment, just cash in a qualified retirement plan, earning a competitive interest rate.
How does putting $400,000 in a retirement plan help, when a person could put to use the $400,000 in the farm operation? because your paying yourself first, and deducting from income tax liability. On that kind of income , you’d be lucky to end up with $250,000 after taxes.
Question I asked is how can a person use the $400,000 in the retirement account in the farm operation?
Can put $400,000 to use in the farm operation and 179 it pay no tax and invest in things that can provide 10-20% ROI. The depreciation on your 179’d equipment most likely will exceed your projected 10-20% ROI’s, and by a wide margin. Show me one thing that you can 179 that’s guaranteed to appreciate in value. I’ll hang up and listen….
Tile or fertilizer storage @ 20% ROI per year on $400,000 = $80,000 year x 20 years = $1.6 million x 35% income tax = $1 million.
$400, 000 x 5 % compound yearly x 20 years = $1 million
One thing I’ve noticed over the years is you’re always very generous on your presumptive returns. If it’s half that guaranteed over a twenty year timeframe count yourself as fortunate, especially on fertilizer storage. And What about seasoned veterans that already have all that stuff, cuz they’re the ones with the tax problems. And they don’t have 20 years of active management left. You ain’t gonna get 20% guaranteed returns renting out an NH3 bottle in retirement. What else you got?
20% is doable year after year for tile here and for the dry, Nh3, and liquid fertilizer storage has been my experience. Didn't have any compounding figured in the 20% roi on the 179 farm investment. Add compounding into the equation for the farm investment it will blow your $400,000 investment that you are peddling out of the water. | |
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Balance Sheet-What's the point?
