What type of tractor to get??

sneaky_pete · Feb 13, 2005

( Sneaky Pete please expand on your statement - "In Texas, you will not have to pay sales tax on a new tractor either."
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In the two counties/four dealers/three colors I have bought tractors, implements, and parts in, every transaction was written up by the vendor as a farm (non-taxed) purchase without even asking me about it. I asked the dealer the first time (when I was buying a tractor) and he said you didn't have to have an ag exemption on your land to get the farm tax exemption on equipment. Whether he was right or not I don't know, but no one I know in these parts pays sales tax on tractor stuff. If I was ever audited I might have a hard time showing that my wife's egg production or my tree plantings constitute a "farm", but I would try! My philosophy on tax matters is to aggressively interpret the law in my favor when there is any gray area, and let the IRS show me the error of my ways after the fact if they care to. They haven't yet. As I have previously said in other threads on taxes, the use of a qualified CPA who understands self-employment and small corporations is HIGHLY recommended.

This is my experience only; your mileage may vary...

rpeter · Feb 13, 2005

The IRS definition of a tree farm is any planting of over one acre. As long as you have planted new trees and they are growing you do not need to show a profit to be considered in the tree farming business. You can also deduct equipment as an expense, like the shinny new tractor!!

PS… I am a CPA
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sneaky_pete · Feb 13, 2005

Thanks Ron, that is good to know. By the time I get audited, I might be up to a whole (additional) acre!

txdon · Feb 13, 2005

"What are the pros/cons of HST?" -jwk 

Oh no /forums/images/graemlins/shocked.gif I'm being sucked into a never ending HST/Gear debate. Well.... I encourage you to use the search to find the many post dedicated to the debate.

I find the HST most useful when doing loader work, clearing brush, and mowing. I know in Sugarland Texas you have no hills so safety on hills is not one of your concerns, but do you have dams or berms?

With HST you can go extremely slow without riding the clutch. This is very helpful when digging up shrubs and pushing over small trees.

When moving and going around corners you can slow down without shifting or slowing the RPM of the mower down.
HST has a cruise control so you do not need to keep your foot on the pedal.

Safety - In a panic situation you can do one of two things push in the clutch (HST has a clutch to change ranges) or just let off the pedal and the tractor will stop. I consider the extremely slow speed that can be obtained with HST a safety feature also.

I encourage you to test drive one while operating the FEL - it is so much easier.

All of the other tractors I have operated have been geared. I will always choose HST for compact tractor work.

The cons - $ and uses a few of your HP.
The biggest pro - makes tractor operating fun! /forums/images/graemlins/smile.gif

JDFANATIC · Feb 13, 2005

Guys,

I think your into the "discretion is the better part of valor" area. Be careful who may be monitoring this forum! /forums/images/graemlins/mad.gif

Varmintmist · Feb 14, 2005

Hold up. A tree farm needs 15 ac to start for hardwoods according to my forester. Things may have changed. Christmas trees you could probably do on a acre. Before I started writing my taxes as a treefarm I had to find out what it was.

You need :
A. the acreage.
B. a forest management plan
C. time, ability, equipment to work on the plan

http://www.treefarmsystem.org/cms/pages/20_5.html

It isnt like hoeing corn, but you dont get to sit on your butt

sneaky_pete · Feb 14, 2005

( I think your into the "discretion is the better part of valor" area. Be careful who may be monitoring this forum! /forums/images/graemlins/mad.gif )

I'd be surprised if anyone could figure out my name or address from my profile, but even so I don't do anything intentionally illegal - as I said, my CPA and I aggressively interpret the tax code for my benefit as much as possible. This is not against the law, and they are welcome to audit me any time (I never have been yet).

rpeter · Feb 14, 2005

You are right Varmintmist, you do need a forestry management plan to file with your schedule T. You also need to up date it every year. It is also important to develop your basis in the existing trees (I am letting the forester do that). I will eventually have over 15 acres in hardwoods. However, the IRS rules say that I only need ONE acre in REFORESTED land in order to qualify as a tree farm. Them are the rules and yes I am a CPA.

rpeter · Feb 14, 2005

I am sorry I should have posted this with my previous post.

timber tax

It is the URL of the “National Timber Tax Website”. These people know the timber tax law better than most of the IRS agents. In the entire Northeast – Mid-Atlantic district there is one IRS agent in New York state that is an expert on timber tax law. All of the rest have to go to him to get advice, etc.

JDFANATIC · Feb 14, 2005

Sneaky Pete,

I'm sure you're doing everything exactly by the book; still I hope you're right... /forums/images/graemlins/tongue.gif /forums/images/graemlins/confused.gif /forums/images/graemlins/blush.gif