Buck Hollow Sporting Goods - click or touch to visit their website Midwest Habitat Company

Brain damaging land Prices

bluedog69 said:
I had an aunt that turned down $7000 an acre near Oswego IL back in the early 90’s. She wanted $8000. I thought she was nuts! Then in about 2006 she had turned down 75,000 an acre and was holding out for 87,000. This was on a 1000 acre track. All in one piece. She has passed and her boy is still farming it as far as I know.
Who knows what the future holds. I think sometime there will be a massive crash.
Click to expand...
75,000 an acre for 1,000 acres of farm ground? What's the story behind that?
 
I’m no attorney.
I am in NC laws are probably different in other states.

Google Fractional deeds.

May help??


Sent from my iPhone using Tapatalk
 
deerdown said:
How many of you have or are considering a revocable trust ? Curious as to how widespread the practice is with landowners. What kind of cost should I expect?
Click to expand...

We set up a trust about 5 years ago. $1,500 was the cost.


Sent from my iPhone using Tapatalk
 
hillrunner said:
75,000 an acre for 1,000 acres of farm ground? What's the story behind that?
Click to expand...
Been several years since I have talked to any of them. She passed away. Her son either owns it now or has sold it. Definitely not farm land price but it is still crazy what good IL ground has sold for.
 
Sligh1 said:
YES^^^^^^!!!!!!
It’s getting lower. & someone says “well the new exemption is still $6.5m” or whatever it is. And what do most liberals say “boo hoo- poor rich people. You’re millionaires & complaining about paying your fair share at $6.5m!” But…. What does it really mean????….

1) a guy who worked 40 years to build a farm that the market has appreciated in value. What is by definition- a FAMILY FARM…. Let’s say this guy has 1,500 acres he built over his WHOLE LIFE!!!!! Used after tax dollars to pay it off over decades & decades. Let’s say it’s now worth $20,000 per acre. Whole life- finally paid for. He dies…. What happens???? Can the kids get this farm to keep as a FAMILY FARM? NO!!!!! Most the time the government (with the amount that’s hitting in 2025 or 2026) is gonna effectively say to the kids “sell your family farm so u can pay us millions in tax liabilities”. & that’s what happens. The kids have to sell some, in some cases, all the land- to pay to the government. That’s insanity!!!!!!! ***worth noting… at the same time- companies like google, FB, Amazon, etc pay 0. Either way- it’s crazy.

2) ok- so the liberal wing gets their way. They get those privileded rich people to pay “their fair share”. Being taxed on family farms they bought with after tax dollars…. What happens next???? THE LAND IS SEGMENTED UP. OR IT’S DEVELOPED. OR - A WEALTHY “CORPORATE FARM” BUYS IT!!! By definition- this is against what the liberals claim they are for!!!!!! They usually hate corporate farmers. Rightfully so, they hate segmentation as it’s detrimental to environment for host of reasons. & last- they hate destruction of land for development as that also ruins the environment FOREVR. Which I agree with them on!!!!! But THEIR POLICIES CAUSE THIS VERY THING TO HAPPEN!!!!! This folks is politics and government 101. A broken system 101. Can u see how flawed this is?!?!?!?
Click to expand...

The current exemption is $12.92 million. It went UP another $850k this year. It doubles for husband/wife ($25.84 million) and the surviving spouse gets carryover if the full amount isn't dispersed after the first spouse passes. There is no way the whole 1500 acres in your hypothetical farm is being sold to cover taxes.

Also, if the heirs are willing to accept less in step-up basis, the land can be valued lower and clear probate. I'm speaking from experience as a close family member recently passed away with 1400+ acres.

And in that scenario, none of it is being sold.

1500 acres is an outlier farm by the way. The average size in Iowa in 2020 was 360 acres.
 
Last edited:
8bitnes said:
The current exemption is $12.92 million. It went UP another $850k this year. It doubles for husband/wife ($25.84 million) and the surviving spouse gets carryover if the full amount isn't dispersed after the first spouse passes. There is no way the whole 1500 acres in your hypothetical farm is being sold to cover taxes.

Also, if the heirs are willing to accept less in step-up basis, the land can be valued lower and clear probate. I'm speaking from experience as a close family member recently passed away with 1400+ acres.

And in that scenario, none of it is being sold.

1500 acres is an outlier farm by the way. The average size in Iowa in 2020 was 360 acres.
Click to expand...
1500 is not as much an outlier as you think. My dad owns 1200 acres and my father in law owns 400. So I keep a close eye on this kind of stuff. I have no intention of ever selling any land. My livelihood depends on this land not getting sold.
 
Nrharris said:
1500 is not as much an outlier as you think. My dad owns 1200 acres and my father in law owns 400. So I keep a close eye on this kind of stuff. I have no intention of ever selling any land. My livelihood depends on this land not getting sold.
Click to expand...
Everyone knows someone with 1500+ and they then overestimate how many farms are of that size because of that.

Within a 10-mile radius of my farm, there are three owners over 1500 acres. A 10-mile radius covers 200,000 acres. That's a lot of acres not held by a 1500+ landowner.

If the family owns that many acres, then they can afford to hire an effective estate planner to enable them to keep hold of the acres perpetually. There are many means at their disposal
 
8bitnes said:
The current exemption is $12.92 million. It went UP another $850k this year. It doubles for husband/wife ($25.84 million) and the surviving spouse gets carryover if the full amount isn't dispersed after the first spouse passes. There is no way the whole 1500 acres in your hypothetical farm is being sold to cover taxes.

Also, if the heirs are willing to accept less in step-up basis, the land can be valued lower and clear probate. I'm speaking from experience as a close family member recently passed away with 1400+ acres.

And in that scenario, none of it is being sold.

1500 acres is an outlier farm by the way. The average size in Iowa in 2020 was 360 acres.
Click to expand...
Interesting & good post.
Isn’t the exception slated to get cut in HALF in just a couple years? I believe it’s going down to $6.5-ish.
On the other hand of this….. I personally know a PILE of people who have needed to sell farms to pay the taxes. A pile!!!!
1500 acres is almost never in one block either. It’s often in multiple small Tracts like 160’s, etc.
Why should these folks have to sell to pay the GOVERNMENT (again)???
Especially in this market where prices on paper went up “40%” in couple years.
Made up example that’s replicated a gazillion times….
Folks N of Des Moines buy land with AFTER TAX DOLLARS in ‘70’s & 80’s. Spend 40 years buying land. Let’s say they paid “$3k an acre”. & because of inflation & rising prices, it’s now worth $20k. & it’s 2,000 acres. Again- yes, that’s a ton of land BUT…. It took them a lifetime to do it!!! They had to do this:
1) pay taxes on their income - use their after tax $ to buy the land
2) pay taxes on the land that also rose over time
3) paid serious amounts of interests to the banks
4) had to spend their life working the land & probably worked their bodies to the core on the land farming it.
5) had a lot of years in there where they didn’t make $ & lost $ some years farming.
On & on …….
Probably middle class people & many of which didn’t have college educations. Spend their whole lives doing this. At the end of their lives… they want to give it to keep it in their family…. SHOULD THEY BE ABLE TO DO THAT OR NOT??
This isn’t about myself or anyone I know. This is about the system of taxation & the ramifications I mentioned above (which results in segmentation, development or corporate farmers getting larger). This is bad for: environment, family farms, motivation to work hard your whole life, century farms, etc etc. It’s fundamentally wrong IMO on top of it. This is all in the name of the bloated GOVERNMENT getting more $ from the people after they took half of it to begin with. It’s easy to dismiss “it’s just those rich people” but that’s a flawed response. All the while - government’s buddy system with the truly super rich & biggest companies don’t have the liabilities these farmers do. It’s wrong. IMO.
 
Sligh1 said:
Interesting & good post.
Isn’t the exception slated to get cut in HALF in just a couple years? I believe it’s going down to $6.5-ish.
On the other hand of this….. I personally know a PILE of people who have needed to sell farms to pay the taxes. A pile!!!!
1500 acres is almost never in one block either. It’s often in multiple small Tracts like 160’s, etc.
Why should these folks have to sell to pay the GOVERNMENT (again)???
Especially in this market where prices on paper went up “40%” in couple years.
Made up example that’s replicated a gazillion times….
Folks N of Des Moines buy land with AFTER TAX DOLLARS in ‘70’s & 80’s. Spend 40 years buying land. Let’s say they paid “$3k an acre”. & because of inflation & rising prices, it’s now worth $20k. & it’s 2,000 acres. Again- yes, that’s a ton of land BUT…. It took them a lifetime to do it!!! They had to do this:
1) pay taxes on their income - use their after tax $ to buy the land
2) pay taxes on the land that also rose over time
3) paid serious amounts of interests to the banks
4) had to spend their life working the land & probably worked their bodies to the core on the land farming it.
5) had a lot of years in there where they didn’t make $ & lost $ some years farming.
On & on …….
Probably middle class people & many of which didn’t have college educations. Spend their whole lives doing this. At the end of their lives… they want to give it to keep it in their family…. SHOULD THEY BE ABLE TO DO THAT OR NOT??
This isn’t about myself or anyone I know. This is about the system of taxation & the ramifications I mentioned above (which results in segmentation, development or corporate farmers getting larger). This is bad for: environment, family farms, motivation to work hard your whole life, century farms, etc etc. It’s fundamentally wrong IMO on top of it. This is all in the name of the bloated GOVERNMENT getting more $ from the people after they took half of it to begin with. It’s easy to dismiss “it’s just those rich people” but that’s a flawed response. All the while - government’s buddy system with the truly super rich & biggest companies don’t have the liabilities these farmers do. It’s wrong. IMO.
Click to expand...
Exactly, and a lot of times it has taken more than a lifetime to grow to the size of these farms. It has taken multiple generations in a lot of cases.
 
Sligh1 said:
Interesting & good post.
Isn’t the exception slated to get cut in HALF in just a couple years? I believe it’s going down to $6.5-ish.
On the other hand of this….. I personally know a PILE of people who have needed to sell farms to pay the taxes. A pile!!!!
1500 acres is almost never in one block either. It’s often in multiple small Tracts like 160’s, etc.
Why should these folks have to sell to pay the GOVERNMENT (again)???
Especially in this market where prices on paper went up “40%” in couple years.
Made up example that’s replicated a gazillion times….
Folks N of Des Moines buy land with AFTER TAX DOLLARS in ‘70’s & 80’s. Spend 40 years buying land. Let’s say they paid “$3k an acre”. & because of inflation & rising prices, it’s now worth $20k. & it’s 2,000 acres. Again- yes, that’s a ton of land BUT…. It took them a lifetime to do it!!! They had to do this:
1) pay taxes on their income - use their after tax $ to buy the land
2) pay taxes on the land that also rose over time
3) paid serious amounts of interests to the banks
4) had to spend their life working the land & probably worked their bodies to the core on the land farming it.
5) had a lot of years in there where they didn’t make $ & lost $ some years farming.
On & on …….
Probably middle class people & many of which didn’t have college educations. Spend their whole lives doing this. At the end of their lives… they want to give it to keep it in their family…. SHOULD THEY BE ABLE TO DO THAT OR NOT??
This isn’t about myself or anyone I know. This is about the system of taxation & the ramifications I mentioned above (which results in segmentation, development or corporate farmers getting larger). This is bad for: environment, family farms, motivation to work hard your whole life, century farms, etc etc. It’s fundamentally wrong IMO on top of it. This is all in the name of the bloated GOVERNMENT getting more $ from the people after they took half of it to begin with. It’s easy to dismiss “it’s just those rich people” but that’s a flawed response. All the while - government’s buddy system with the truly super rich & biggest companies don’t have the liabilities these farmers do. It’s wrong. IMO.
Click to expand...

It's like you are describing one of my friends. Triple taxing would fall on them (taxed money bought the ground, it will be taxed when inherited, and it will be taxed when sold)
Here's the scenario with a little background to start.

40 acres a few miles east of Ankeny just sold for $75,000/acre to be developed into ankeny schools. An nearby/adjacent property owning family farms 4000 acres between here and Marshalltown. At $20k/acre, that's $80mil. However, they have a fair amount of ground that will become residential tracts and sell for a huge premium when that day comes
 
With good financial/estate planning early on, having to sell the farm to pay taxes can probably be avoided (assuming that's the goal).
 
Irrevocable trust and gobs of life insurance.

IR trust takes a lot of actual trust on your part.

Life insurance death benefits are tax free, so even if your assets are liquidated, your kids have cash to either try to buy it back, or something else.
 
With an irrevocable trust, generally speaking, the grantor permanently relinquishes control of the assets placed in the trust. Therefore, an irrevocable trust can be designed so that the trust's assets are not included in the grantor's gross estate, thereby sheltering them from potential estate taxation.
cchadww said:
Curious why an IR vrs revocable trust?


Sent from my iPhone using Tapatalk
Click to expand...
 
@cchadww If you go into a nursing home, they will liquidate your assets and keep you alive long enough to burn through all of it, at a ridiculous pace. Nursing homes can't touch assets in an IR trust, because the assets don't belong to you. I believe there is a time period involved too, maybe a 5 year reach back period, but I'm not certain anymore. I used to know, but regulations change over the years. Check with a qualified financial advisor / planner.

Nobody likes to think about life insurance either, but if you really want to leave your family something that the government can't tax the shit out of, life insurance is the way to go.
 
Talking out loud...Here's what I'm thinking for estate planning..

Single member LLC's should have a TOD in the operating agreement to avoid probate and associated costs. Better would be to have land held in a revocable trust because TOD's are not bulletproof in case of creditors. If land is currently held in LLC's, not sure the process to transfer deed to trust as opposed to transfer membership interests to a trust.

Multimember LLC's should have Rights of Survivorship if held with spouse or family member that you wish to receive your share after death.

All bank accounts should have POD designations.

What else should one be thinking about besides talking to an estate attorney? I'd kinda like some idea of what might be the setup before talking to someone.
 
deerdown said:
Talking out loud...Here's what I'm thinking for estate planning..

Single member LLC's should have a TOD in the operating agreement to avoid probate and associated costs. Better would be to have land held in a revocable trust because TOD's are not bulletproof in case of creditors. If land is currently held in LLC's, not sure the process to transfer deed to trust as opposed to transfer membership interests to a trust.

Multimember LLC's should have Rights of Survivorship if held with spouse or family member that you wish to receive your share after death.

All bank accounts should have POD designations.

What else should one be thinking about besides talking to an estate attorney? I'd kinda like some idea of what might be the setup before talking to someone.
Click to expand...

FWIW, our legal council advised us to have our trust as the actual owner/member in all our real estate and LLC holdings. Transferring the deed to the trust was simple—a call to your courthouse can give you the process.


Sent from my iPad using Tapatalk
 
You must log in or register to reply here.
Top Bottom