Are most family ranches corporations?

[mrj]

On another thread Rancher said most ranches are corporations and if the family sold after the Death Tax is eliminated, the Capital Gains Tax would be worse than the Inheritance Tax.

What do the rest of you say?

!. How many have incorporated your ranches?

2. What are the benefits and the problems? Suppose this would vary some from state to state???

3. Have any of you been harmed by the rules/laws changing after you set up your corporation?

I believe the Death Tax is so immoral and such a failure at breaking up the very largest "estates" that there is no reason to keep it. Especially when considering the high cost of administering and collecting it. I read some years ago that it may be as high as 60 or 65% of the tax collected. Does anyone else know if that is accurate?

MRJ

 

[rancher]

I should have said many and not most, as I do not have the facts on that one. In the 70's many were incorporated for tax reasons.

 

[Jinglebob]

MRJ

From what I can gather from my tax man, every ranch has different reasons for incorpoating.

I've looked into it as it seems it would be an easier way to pass the ranch down to the next generation when there are more than one child or heir, who is interested in ranching. There are tax advantages and disadvantages, both.

It looks to me like, passing on shares would be easier than acres, year after year. But I've never done it yet, so I guess I must not believe it would be an advantage.

My parents and I had a legel partnership for years and there was good and bad in it. But no real tax advantages.

I don't believe we have to worry about big corporations taking us over, as I don't think many of us would work for the same wages we are getting now, if we had to work for someone else. we only do it now because we feel we are our own bosses and hope for the best. I think that so many who signed up with Tyson on raising chickens was a real eye opener for many.

 

[Kathy]

MRJ, my dad built up equity in the ranch that came from other business ventures as well. When he died, and then later my mother, it left my sister and I with a bit of hassle. Had I not been quick to catch my mothers old accountants mistakes, and get a new accountant that understood the laws, we would have lost the farm entirely to pay taxes . It is a long story, but he was wrong and I was right, and the only taxes we paid, were on her RSP funds.

I believe it is easier to kill a person, than a company. Winding down the old company and moving its assests into our personal hands takes time, and the added income kills you at tax time. But, it has been nice to have over the last few years with limited income from BSE. Of course, most of what I remove from the old co. goes to the government in taxes.

The only good thing about a corp. is the corp can pay its shareholders dividends, and these are taxed a little differently and more beneficially than regular wages. Dividends cannot be used for calculating our Canadian Retired Savings Plan contribution though.

Our farm will remain a private partnership for now.