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Old 12-10-2010, 01:19 AM
 
221 posts, read 1,044,226 times
Reputation: 375

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HI All - I've been hunting for a thread on this topic and have been surprised not to see one.

Last year my brother and sister and I inherited the family farm - 240 acres of corn and soybeans. It's been rented to tenants since the 1960s. There is no house or barn on the land anymore - just farm land. None of us live in the state where the farm is located.

So what do we do with it? As a temporary measure we hired a farm management company that works directly with the tenant, who I think is someone who farms many similar farms in that area (they don't live on our farm land.)

We all disagree on what to do. My brother wants to sell it. My sister wants to keep it in case her children might want it one day.

I don't want to sell it to a property developer who would turn it into houses. The area is slowly becomming urbanized, but I refuse to contribute to that. I also refuse to sell it to an agribusiness like Monsanto. I've been observing the decline of American towns due to agribusiness taking over from family farmers (and reading a lot about the issue) and I won't contribute to that, either.

I had an idea to give it away to a young farming family who would promise to maintain it as a family farm for the next 100 years (or something like that.) But according to attorneys in the county seat near the farm if we did that the IRS would hit us with a hefty tax bill - apparently one can't just give away or sell property for lower than it's assessed value without paying huge taxes.

Boy, that makes me mad. How on earth can young farmers start out with a farm of their own these days? If we sold it at current market value it would be worth about 2.5 million. How could any family farmer afford to buy a farm if that's about what they all cost?

If we keep on as we are we're part of what is called by some "industrial farming" with crops that go to industry rather than to feed families. That makes me uneasy, although I know there is debate about this issue.

I don't think renting the farm to an organic farmer would be practical because wouldn't it take many years for the soil to become free of chemicals for the crops to be certified organic? How would we support the farm during that period?

I just don't know what to do and my brother and sister and I are on the verge of fighting seriously about it. We'll have to do something sometime.

Surely others have faced this issue. Your ideas and conversation are welcome. But try to be realistic - none of us is wealthy and none of us really has any farming knowledge.

Thanks!
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Old 12-10-2010, 08:20 AM
 
Location: overlooking the mighty MO
697 posts, read 1,137,841 times
Reputation: 1336
thats a problem we have out here on the plains. land has become so expensive that a young farmer has a snowballs chance in hell of making a go of it--- just 3 weeks ago some cropland sold at auction for $7300 an acre to out of state interests this is absolutly crazy of whats happening to the price of cropland-- this is a very bad subject so many youngs guys want to farm but just can't get their foot in the door
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Old 12-10-2010, 09:32 AM
 
4,259 posts, read 9,882,437 times
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Is there a local land trust or conservancy in that area? This is a national organization: American Farmland Trust but my experience in PA is that more localized groups do most of the actual work for farmland preservation and conservation easements.

One thing that is sometimes off-putting in working with these folks is that they often need a cash donation to cover the survey, recording and endowment for enforcement of a farmland preservation easement, that might run to $10,000 for a typical southern PA farm, and sometimes more depending on how complicated the survey is. Although that would be deductible and sometimes the value of the development rights is also deductible, you need sound legal and tax advice.
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Old 12-10-2010, 09:34 AM
 
Location: CasaMo
15,587 posts, read 7,662,437 times
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Cut in into three parcels and each of you has 80 acres. That way, each of you can make a decision.
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Old 12-10-2010, 09:45 AM
 
Location: Central Texas
20,486 posts, read 38,399,828 times
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How about a long-term lease to a young farm family just getting started? You could keep it reasonable, it would stay in agriculture, they could be responsible for the care of the land and fencing, etc., you'd be responsible for tax payments and such. That's one way for a young farm family to get started - they lease the land to the mutual advantage of the farmer and the land owner. That also buys time for the three of you to come to a mutual decision.

Or, as said, divide it into three parts and the brother can sell his part and you and your sister can lease out the 160 acres remaining.
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Old 12-10-2010, 11:50 AM
 
175 posts, read 681,648 times
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I have a family farm, mines only a hobby farm. 16 acres, but its enough for me. 1st off, while your making a decision see if you are enrolled in the farm deferment tax. If you are and you sell the farm you will have to pay 3 years back taxes for reg. land value. That could be thousands of dollars. If you aren't and don't won't sell for a while, ENROLL! This can save you thousands of dollars. For example I had a 1/2 acre that wasn't farm deferred. It's tax value was 18,000. This was for an empty lot. I enrolled this 1/2 into the farm deferrment it is now valued at $2.50. I now pay taxes on $2.50 worth of land instead of $18,000 worth of land.

2nd farms can't sit idle. They will become overgrown full of weeds and trees in less than 5 years. Your sister needs to understand this. Giving her kids 250 acres of land that needs to be cleared is hardly a gift unless her kids are avid hunters. Also tractors are expensive, impliments are expensive. I'm talking the skys the limit here. With that much land you would probably need a tractor that costs $20,000 used and the sky is the limit on how much you want to spend. How old are her kids now? Does you sister know what an impliment is? Plus there are no barns, you don't buy a $40,000 tractor or a $100,000 combine and let it sit in a field.
Not trying to be snotty, I'm a girl too. However, I learned to drive a tractor when I was 12, I have put up hay, built fence, bush hog fields, reseeded, limed and fertilized fields, ect. I am only 29 now.

3rd if you didn't grow up farming you probably aren't going to start later in life. Farming is hard work, the job is never done. You do it in all types of weather, on holidays, on your birthday and anniversary.

If I were you and didn't want to see the land developed I would just keep leasing it out to other farmers. Make enough money to pay the taxes on the land and make the renters pay for the upkeep/improvements. Your not going to be able to rent it for much else. Somebody probably needs to stop by a couple time a year and make sure they are treating the land correctly. Not planting the same thing every year in the same place, not overstocking pastures, ect.

Let me know if you come up with any more questions, I did all this before just on a much smaller scale.
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Old 12-10-2010, 12:53 PM
 
Location: overlooking the mighty MO
697 posts, read 1,137,841 times
Reputation: 1336
good advice Ima, but tell this old man where you find a tractor for $40,000 and a combine for $100k?? mine sure cost a lot more than that
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Old 12-10-2010, 01:09 PM
 
4,919 posts, read 20,167,599 times
Reputation: 6227
It may not matter much what type of farming or land use anyone wants. If the brother wants to sell, he can force a partition that may require the others to come up with the money to buy him out or he can force a sale and the sale amount is divided between all. If the brother really wants to sell you should get a lawyer to tell you what he can do or what will happen if he forces a partition sale.

It sounds like he wants to sell the property and get his share of the money. Can you and your sster buy him out and you too can fight it out without worry of a forced sale?
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Old 12-10-2010, 02:37 PM
 
Location: North Beach, MD on the Chesapeake
34,454 posts, read 43,293,594 times
Reputation: 44120
As someone said, subdivide into three parcels (be snarky and make the one that wants to sell take the middle one).
Enroll the land in Ag Preservation. This has to be done for tax reasons.
Keep renting to an absentee farmer.
Explore your state's land trusts or conservancies (Chestnut Land Trust is big here in MD) and donate the whole parcel to them taking a huge tax deduction and ensuring the land will always be open (you put that in the deed of transfer, if they try to sell to a developer they violate the terms and the land reverts back to you).
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Old 12-10-2010, 11:59 PM
 
Location: Pennsylvania
16,786 posts, read 10,700,818 times
Reputation: 29768
Quote:
Originally Posted by PacificFlights View Post
It may not matter much what type of farming or land use anyone wants. If the brother wants to sell, he can force a partition that may require the others to come up with the money to buy him out or he can force a sale and the sale amount is divided between all. If the brother really wants to sell you should get a lawyer to tell you what he can do or what will happen if he forces a partition sale.

It sounds like he wants to sell the property and get his share of the money. Can you and your sster buy him out and you too can fight it out without worry of a forced sale?
those are state laws and I don't see where the location is mentioned.
Since your brother apparently wants the money, could you and your sister buy him out? Rather than actually dividing the land, which could involve zoning laws and further family disputes (whose parcel has more road frontage, better view, ad naseum) I'd get the whole thing appraised and give him 1/3 of that value.

I think long term lease to a young farmer is a good idea.
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