Are tractors and equipment a good investment right now?

[jyoutz]

On rough ground, much easier on your body, easier to get on and off if you need to during a mow, also much more compact and maneuverable for a trailer or tight quarters lawns. I much prefer them.

Thanks. I’ve only seen them once and wondered why.

 

[rScotty]

Me too except there is a move to simply ban like is already the case for blowers and brush cutters and 25 hp and greater non tier compliant diesels

There was a time when California was a leader in adopting technological and social changes. Nobody really questioned that. But influence is cyclical, and results matter. So I think people will be watching more closely. in some things - here I am thinking of their building codes versus threats like flood and fire - the West Coast seems to be more of an outlier rather than a leader.

rScotty

 

[Yander]

Me too except there is a move to simply ban like is already the case for blowers and brush cutters and 25 hp and greater non tier compliant diesels

So offering cash for clunkers is the first step in the plan to ban. Yeah!

Hope it flops like the first attempt. I think it will.

 

[ultrarunner]

It wiped out all of the low cost cars here...

Also spurred new sales for a time.

 

[5030]

Typically, you depreciate a piece of farm equipment over a designated period of time so that once it is completely depreciated you can replace it with new. I depreciate everything over 5 years, buildings, tractors, trucks and equipment. Once it is depreciated, it is a dead expense.

Depreciated or not, all the upkeep expense and / or upgrades are still 100% tax deductible. I even write off all my diesel fuel as well as the mileage going to pick up the parts or filters. Same applies to my rental properties. Anything and everything I put into them is a tax deduction and why I retain a very astute accountant as he handles all of that for me. All I do is provide him with a spread sheet and keep all the receipts. I'd say in the past 10 years we have not paid a dime in Federal, State or local taxes and every year we get a sizeable refund as well, this year is no exception. Little less this year because of the new tax laws but regardless we are still getting it. Lots of other business owners I know all say you should adjust to just break even and not pay and not get a refund. Not my thing. I always want to get a refund no matter what. Like a savings account for us and be assured we will be buying (and depreciating equipment this next year, just like we do every year.

It's a game in reality but it takes an astute accountant to play and we have that.

I'm sure the owner of this forum also plays the same game we do. It's all about 'business' after all.

Best thing we ever did was becoming a bona-fide registered corporation. The tax breaks are really unbelievable, again, if you know what you are doing that is.

I admit I don't but then that is what we pay the CPA for and interestingly, he's a deductible expense as well.

 

[5030]

Hmmm - I've never considered a tractor or implements as an investment. I buy what I need and use it.

That is the difference between being an individual taxpayer and being incorporated and doing business professionally. If you think for a second that big corporations are actually on the hook for taxes ever, you are sadly mistaken. We play in the same ballgame, just smaller.

 

[ultrarunner]

The beauty is incorporation is open to many with few exceptions...

As are LLC...

 

[5030]

So offering cash for clunkers is the first step in the plan to ban. Yeah!

Hope it flops like the first attempt. I think it will.

One thing we never did was participate in that fiasco except to say that when the 'smoke' cleared, I sold a potential clunker for a wad of cash. That whole thing was a joke perpetrated on the buying public and nothing more. Wiped out the used vehicle market for a while and allowed me to off a potential clunker for way more than it was really worth.

I'd do the same with my pre-4 tractors in a minute if the gummit instituted a similar program as the 'cash for clunkers' was. I'd do it the same way I did it back then as well. You want a pre 4 unit and I have one (or more), you can buy it for what I want and no less and believe me, I'd roll in the inflation-devaluation factor in a second and probably add a bit as a buffer too.

 

[5030]

The beauty is incorporation is open to many with few exceptions...

As are LLC...

That is true but... You better be ready to play the game and you better be ready to have the resources available to do it. Lots of licensing and regulation hurdles to deal with and that applies to any state and every state is different. Lots of 'I's' to dot and 'T's' to cross and you better be doing it right all the time.

Buying a tractor and implements as an individual is always a looser when it comes to taxable liability. No exceptions to that.

We have and maintain exemption certificates with every supplier we deal with and we never consider buying anything without looking to see what the tax liability is before hand and that includes all the equipment and machine tools and fabrication equipment I have in the shop as well. As an individual, I really own nothing and I like it that way. Like the 2 new welders I just bought, they get written off (depreciated) as well. Like I said earlier, it's all a game you play but again, you have to have a very astute accountant that can differentiate between the 'grey' area and an audit, not that I fear being audited by the Fed anyway, because we always have the hard receipts to back everything up.

Having said that, I would never recommend any individual to attempt it. No reason to actually unless you actually have the investments like a working farm or a registered business to do it with in the first place. In reality, it's much simpler to file as an individual and take the standard deductions and call it good. Once you step out of that individual filing status and into the world of corporate filing, it gets very complex very quickly and you better be able to keep good records and have all the paperwork (receipts) to back it up because you never know when the IRS will tag you for an audit.

 

[ultrarunner]

Grandfather incorporated the auto sales in 1950... and had to add "Inc." to the name as a requirement... don't see that much anymore... I loved using the Corp Seal to emboss... maybe I will ask about it.

Before that it was a sole proprietorship.... it was Incorporate or add "and Sons"

Boy has that area transformed down the drain from the bustle of the 1940's to mid 1960's.

It had a very active business community with Chamber of Commerce, Breakfast Club, Merchant Association, etc...

The old pictures the men wore hats and ties with mostly white shirts...

Demographics changed and with that so did everything else but it lasted 75 years...

I've only been in partnerships.

The farms are LLC and members of all kinds of farm and trade groups and the co-ops in two states...