How Smart Tax Planning Funds Farm Growth

[00:00:00]Say a land, you have an opportunity to purchase some land. You know, for the most part in our operation, we've tried to keep that out of the corporation, the S corp. So, we bought we buy it personally and then the corporation rents it from us. Well, your checking account becomes a pass-through account.

[00:00:13]You get the rent, but then you got to go make the land payment, but you get taxed on the way in. So, managing the tax bill on the personal side begins to be a a big big problem. Not pro- I don't want to say problem, but it's just something you have to manage. With these tax credits, you can manage your tax liability on the S corp to get to minimal, you know, tax liability. And if there's excess credit there, it passes to the owners of that S corp to apply to their personal tax liability. So, when you talk about whether it's my parents have bought land or I me and my wife have bought land, you know, in terms of ownership there, even though the carrots generated from the corporation, if there's enough left over after it's been applied to the tax liability of the farm, that passes through to the owners.

[00:00:51]And all of a sudden, it's like, "Wow, now we can manage this tax liability to help, you know, make the land payments that we need to make." So, that was that was a big piece for us. So, generally, you know, we we get taxed so hard on the the personal side because you're receiving that cash rent, but then having to go, you know, make the payment.