up to 150,000 dead cattle in South Dakota

[Pleasant Grove Farms]

ok, XBAR, you are the smartest most educated most knowing person about accounting here....

however, I am paying for the land; I am paying the taxes on the land, I am paying for the water taps, the spray, the fertilizer, the reconstruction from the flooding two years ago that has created a nightmare; perhaps in all your book learn'n land has no expenses, but I can't figure out then why I have to pay all of these expenses related to owning land.....
I raise cattle, these girls very graciously make these payments for me; if I didn't have land I wouldn't have cows....
if I didn't have cows I wouldn't need land......

so in theory, if you only own land, then you wouldn't have any expenses; now I am not talking accounting mumble jumble, I am talking real world....
you would be like other absentee landowners we have here that don't control their weeds nor maintain decent fences, etc.  Probably because some accountant told them that land has no expenses??

call it whatever you want, Mr. Expert, land has cost to me, perhaps it doesn't to you; aren't you lucky!!!  ;D

 

[RyanChandler]

ok, XBAR, you are the smartest most educated most knowing person about accounting here....

however, I am paying for the land; I am paying the taxes on the land, I am paying for the water taps, the spray, the fertilizer, the reconstruction from the flooding two years ago that has created a nightmare; perhaps in all your book learn'n land has no expenses, but I can't figure out then why I have to pay all of these expenses related to owning land.....
I raise cattle, these girls very graciously make these payments for me; if I didn't have land I wouldn't have cows....
if I didn't have cows I wouldn't need land......

so in theory, if you only own land, then you wouldn't have any expenses; now I am not talking accounting mumble jumble, I am talking real world....
you would be like other absentee landowners we have here that don't control their weeds nor maintain decent fences, etc.  Probably because some accountant told them that land has no expenses??

call it whatever you want, Mr. Expert, land has cost to me, perhaps it doesn't to you; aren't you lucky!!!  ;D

I wouldn't say I'm not 'most knowing here.' But clearly, more in the know than you.  Land does have costs associated with it. The maintenance/ up keep items you've listed are expensable.  The interest on your mortgage is expensable. The principle is not.  Go ahead, try to expense the principle against your gross income and see if the IRS doesn't come give you a visit. 

 

[Gargan]

ok, XBAR, you are the smartest most educated most knowing person about accounting here....

however, I am paying for the land; I am paying the taxes on the land, I am paying for the water taps, the spray, the fertilizer, the reconstruction from the flooding two years ago that has created a nightmare; perhaps in all your book learn'n land has no expenses, but I can't figure out then why I have to pay all of these expenses related to owning land.....
I raise cattle, these girls very graciously make these payments for me; if I didn't have land I wouldn't have cows....
if I didn't have cows I wouldn't need land......

so in theory, if you only own land, then you wouldn't have any expenses; now I am not talking accounting mumble jumble, I am talking real world....
you would be like other absentee landowners we have here that don't control their weeds nor maintain decent fences, etc.  Probably because some accountant told them that land has no expenses??

call it whatever you want, Mr. Expert, land has cost to me, perhaps it doesn't to you; aren't you lucky!!!  ;D

I wouldn't say I'm not 'most knowing here.' But clearly, more in the know than you.  Land does have costs associated with it. The maintenance/ up keep items you've listed are expensable.  The interest on your mortgage is expensable. The principle is not.  Go ahead, try to expense the principle against your gross income and see if the IRS doesn't come give you a visit.

The IRS will only audit him if he's a conservative..  (lol)

 

[RyanChandler]

Yea bc there's so many 'liberal' auditors  :

 

[chambero]

Ryan:

I understand what you are saying , but you are talking apples and oranges about land costs.  Of course the cost of purchasing land is not tax deductible, but that doesn't mean its a expense to someone raising cattle for a living. 

When my company goes and buys another business, we don't get to deduct that cost, but the money we spent to buy it certainly doesn't show up in the profit column.

It's probably irrelevant in this specific case anyway - I'd imagine most of the land up there was paid for a long time ago and like most people trying to make a living ranching - the land they actually use is probably a combination of inherited land they own + leased land in most cases.  Very few businesses of any kind can survive losing 25-75% of their assets overnight.  Whether the subsidized agriculture is right or wrong, it exists.  To me, the USDA helping out cattle ranchers in a case like this is no different than helping out the wheat farmer who got hailed on.

Which brings me to Commercialfarmer.  You reference your family being wheat farmers.  If you, your parents, or grandparents have never gone down to the USDA office to sign up for any of their programs or bought crop insurance, you have can throw the stones you are throwing.  But I have a suspicion that's not the case. 

Did you giggle to yourself like a little girl when you came up with "Commiebero"?  Folks that like to call names and call people idiots that they don't know anything about are probably looking in the mirror.  I suspect I've had a lot more formal and practical education in finance than you ever thought about.  I also suspect I've probably had more money "stolen" from me in taxes than you've ever thought about.  If I'm wrong, you are quite the high roller.  So yes, I do put my money where my mouth is and am probably just as concerned about my two boys future as you are yours.  I'm certainly concerned enough about them to teach them not to be hypocritical cynics.  That doesn't get you anywhere outside the computer keyboard.  By the way, FEMA was in OKC as they should be.  But you are correct the heavy lifting is done - as always - by friends, neighbors, churches, etc.  The taxes my Texas family pays to the state of Oklahoma for income off mineral rights will go to help rebuild the public infrastructure in and around Moore.  And that's just fine.  So get off your hypocritical, poor-me, everybody-is-stealing-from-me high-horse . 

I haven't paid enough attention to know what the USDA is or isn't doing in this case.  My guess would be that if disaster relief is provided by the USDA, it's in the form of low interest loans.  That's the form almost all disaster assistance takes - whether it's folks devastated by tornadoes or hurricanes.  That's not exactly going to break the U.S. economy.  As I said before, I'd rather subsidize people working and creating jobs than giving it to programs that encourage people not to work.

 

[Pleasant Grove Farms]

Again XBAR, I'm play'n with ya. Do you think after filing taxes for more years than you are old I don't know this?
Legally and in accountant language what you say is right  but just like many things its not real life. The money to pay for the land has to come from somewhere and because the cows utilize the land, to us, NOT to Uncle Sam,  the land is an expense.  Feeding the cows is an expense... The land feeds the cows, hence the land is an expense TO US.  It's real world stuff; I don't expect you to understand.

As history proves so far anyway, land is also a great investment.

My father bought land for less than $10/ acre. My father never graduated from high school. He was a very aggressive farmer/cattleman all his life.  Needless to say he is now worth millions....the cattle paid the bills. I think it was a golden era of opportunity he lived in. 

 

[chambero]

You have to be one heck of a businessman to make a living solely from cattle nowadays (really from any kind of agriculture).

If you read the published histories on the the big ranches (XIT, etc) that were formed back in the late 1800s, the land and capital were furnished by outside investors more often than not - or at least family businesses that made their money from something else.  It has always been hard to pay for the land with agriculture - maybe not as hard as now, but its never been a sure thing.

Pleasant Grove Farms - it was probably just as scary and risky for your father to buy that $10/acre land as it is to any of us thinking of trying to buy land and make it now.  I hope we all have a proper appreciation for our ancestors that did it.  I think we do - that's why so many of us still fight to hang onto they made for us - against common sense sometimes.

I really wonder what it's going to look like in 10-20 years.  There certainly aren't many people in my age class (early 40s) interested in messing with cows in my area.  I'm wondering if there will be less demand for land to lease as fewer people are involved.  I know one thing, it's going to be awfully hard to come up with the cash to buy females in the next few years at reasonable prices due to the sell-downs and die-offs such as this.  Feed mills in our area are already feeling the pain due to the low numbers of cows.

 

[Pleasant Grove Farms]

I don't think the $10/acre land was scary to him, but he said he was one of the first in this area to pay $100/acre....and he said ppl were very angry about it; that it was going to drive up land prices around them and make buying land unaffordable to them.  So fun to listen to these successful farmers/ranchers tell their stories.  Every generational farm/ranch has lots of stories in its heritage, the legacy that goes along with the land.
The ranchers out west do ranch land that has been in their families for generations and part of the searing pain of loosing this many head of livestock is that in all those past generations, it had never happened before on this scale; they feel like they have let everyone down, like they have failed at what so many before them have done successfully.

 

[RyanChandler]

Ryan:

I understand what you are saying , but you are talking apples and oranges about land costs.  Of course the cost of purchasing land is not tax deductible, but that doesn't mean its not a expense to someone raising cattle for a living.  

When my company goes and buys another business, we don't get to deduct that cost, but the money we spent to buy it certainly doesn't show up in the profit column.

If it's not tax deductible, it's not an expense.  It's an investment.

You're right.  But it does show up on the left side of the balance sheet.

Again XBAR, I'm play'n with ya. Do you think after filing taxes for more years than you are old I don't know this?
Legally and in accountant language what you say is right  but just like many things its not real life. The money to pay for the land has to come from somewhere and because the cows utilize the land, to us, NOT to Uncle Sam,  the land is an expense.  Feeding the cows is an expense... The land feeds the cows, hence the land is an expense TO US.  It's real world stuff; I don't expect you to understand.

"legally" is as 'real world' as it gets.  Nice try, though.

 

[Pleasant Grove Farms]

it's OK XBAR.....

as I said, I don't expect you to understand.....

 

[nate53]

I would consider land an expense because it is one.  Payments have to be made annually (loan) and ideally payments would at least in part come from what one grows or runs on it.  Is it tax deductible no, only interest is.  Does it fit the definition of an expense for an accountant, NO.  You all don't appear to be arguing about the same thing? ;D

 

[RyanChandler]

I would consider land an expense because it is one.  Payments have to be made annually (loan) and ideally payments would at least in part come from what one grows or runs on it.  Is it tax deductible no, only interest is.  Does it fit the definition of an expense for an accountant, NO.  You all don't appear to be arguing about the same thing? ;D

The definitions I personally use are the legal definitions, as those are the terms my banker and accountant IN THE REAL WORLD speak in.  You can call it what you want - but the fact of the matter is: When you go to prepare your financial statements, the principle pmt of your mortgage will NOT be considered an expense.

Now what you could do, is create a DBA or LLC for your 'cattle company,' and LEASE the grazing rights to 'it.'  The downside to this option is that you'll have to pay income taxes on that exchange- which could put you in a net negative situation. 

 

[doc-sun]

ok, XBAR, you are the smartest most educated most knowing person about accounting here....

however, I am paying for the land; I am paying the taxes on the land, I am paying for the water taps, the spray, the fertilizer, the reconstruction from the flooding two years ago that has created a nightmare; perhaps in all your book learn'n land has no expenses, but I can't figure out then why I have to pay all of these expenses related to owning land.....
I raise cattle, these girls very graciously make these payments for me; if I didn't have land I wouldn't have cows....
if I didn't have cows I wouldn't need land......

so in theory, if you only own land, then you wouldn't have any expenses; now I am not talking accounting mumble jumble, I am talking real world....
you would be like other absentee landowners we have here that don't control their weeds nor maintain decent fences, etc.  Probably because some accountant told them that land has no expenses??

call it whatever you want, Mr. Expert, land has cost to me, perhaps it doesn't to you; aren't you lucky!!!  ;D

I wouldn't say I'm not 'most knowing here.' But clearly, more in the know than you.  Land does have costs associated with it. The maintenance/ up keep items you've listed are expensable.  The interest on your mortgage is expensable. The principle is not.  Go ahead, try to expense the principle against your gross income and see if the IRS doesn't come give you a visit.

xpert is right that principle is not deductable, but you have been able to write off land improvements under bonus depreciation in recent years. these improvements were depreciable over 15 to 20 years before but the bonus depreciation rules have allowed all or half of them to be written off in the year incurred recently. you can amend 3 yrs returns if you haven't taken advantage of this. xpert must work for the gov't. his philosophy is similar to most irs agents i have battled and mostly defeated the last 35 yrs.

 

[RyanChandler]

ok, XBAR, you are the smartest most educated most knowing person about accounting here....

however, I am paying for the land; I am paying the taxes on the land, I am paying for the water taps, the spray, the fertilizer, the reconstruction from the flooding two years ago that has created a nightmare; perhaps in all your book learn'n land has no expenses, but I can't figure out then why I have to pay all of these expenses related to owning land.....
I raise cattle, these girls very graciously make these payments for me; if I didn't have land I wouldn't have cows....
if I didn't have cows I wouldn't need land......

so in theory, if you only own land, then you wouldn't have any expenses; now I am not talking accounting mumble jumble, I am talking real world....
you would be like other absentee landowners we have here that don't control their weeds nor maintain decent fences, etc.  Probably because some accountant told them that land has no expenses??

call it whatever you want, Mr. Expert, land has cost to me, perhaps it doesn't to you; aren't you lucky!!!  ;D

I wouldn't say I'm not 'most knowing here.' But clearly, more in the know than you.  Land does have costs associated with it. The maintenance/ up keep items you've listed are expensable.  The interest on your mortgage is expensable. The principle is not.  Go ahead, try to expense the principle against your gross income and see if the IRS doesn't come give you a visit.

xpert is right that principle is not deductable, but you have been able to write off land improvements under bonus depreciation in recent years. these improvements were depreciable over 15 to 20 years before but the bonus depreciation rules have allowed all or half of them to be written off in the year incurred recently. you can amend 3 yrs returns if you haven't taken advantage of this. xpert must work for the gov't. his philosophy is similar to most irs agents i have battled and mostly defeated the last 35 yrs.

You can only deduct an amount equal to or less than your taxable income for the year.  I work for a real estate developer; not the govt.  I don't deal w/ the IRS either- if its grey, I stay away.  With your track history, this might be the safest bet for you as well. 

 

[Pleasant Grove Farms]

<rock>

And so the expert has set us all straight on something that has nothing to do with the original topic.....
True to form. 

We are all of us isolated and living with east river vibes. 

 

[oakview]

If you have cattle and they run on pasture, land cost is a true expense, whether you can deduct it or not.  It may not show on your tax return, but that is not the deciding factor on if it is a real expense.  If you rent the pasture, your expense is the rent you pay.  If you own the pasture, if there is a loan or not, you have to consider the amount you could get for that pasture if you rented it out as a cost of doing business.  In addition to the expenses of my cow herd, hay, mineral, bedding, vaccinations, vet bill, etc., if I exclude a "fee" for the pasture I use, I'm only kidding myself if I compute the cost of doing business.  If I could rent my pasture to someone else for $75/acre, I have to "charge" myself a like amount when figuring my costs of the beef I produce.  There are times when it would have been more "profitable" to sit in the house and collect the rent.  This argument reminds me of a friend of mine who years ago told me they were making $100/head on their feedlot cattle when everybody else was losing at least that much.  After quizzing him for a while about what they were doing that the rest of us couldn't figure out, he said, "Well, the corn is just out in the field.  All we have to do is go get it."  How can you argue with logic such as that?

 

[doc-sun]

ok, XBAR, you are the smartest most educated most knowing person about accounting here....

however, I am paying for the land; I am paying the taxes on the land, I am paying for the water taps, the spray, the fertilizer, the reconstruction from the flooding two years ago that has created a nightmare; perhaps in all your book learn'n land has no expenses, but I can't figure out then why I have to pay all of these expenses related to owning land.....
I raise cattle, these girls very graciously make these payments for me; if I didn't have land I wouldn't have cows....
if I didn't have cows I wouldn't need land......

so in theory, if you only own land, then you wouldn't have any expenses; now I am not talking accounting mumble jumble, I am talking real world....
you would be like other absentee landowners we have here that don't control their weeds nor maintain decent fences, etc.  Probably because some accountant told them that land has no expenses??

call it whatever you want, Mr. Expert, land has cost to me, perhaps it doesn't to you; aren't you lucky!!!  ;D

I wouldn't say I'm not 'most knowing here.' But clearly, more in the know than you.  Land does have costs associated with it. The maintenance/ up keep items you've listed are expensable.  The interest on your mortgage is expensable. The principle is not.  Go ahead, try to expense the principle against your gross income and see if the IRS doesn't come give you a visit.

xpert is right that principle is not deductable, but you have been able to write off land improvements under bonus depreciation in recent years. these improvements were depreciable over 15 to 20 years before but the bonus depreciation rules have allowed all or half of them to be written off in the year incurred recently. you can amend 3 yrs returns if you haven't taken advantage of this. xpert must work for the gov't. his philosophy is similar to most irs agents i have battled and mostly defeated the last 35 yrs.

You can only deduct an amount equal to or less than your taxable income for the year.  I work for a real estate developer; not the govt.  I don't deal w/ the IRS either- if its grey, I stay away.  With your track history, this might be the safest bet for you as well.

xpert is wrong as usual. bonus depreciation can throw you into a deductable loss situation on any return and create an nol (sec 179 is limited to offsetting earned income including w2 wages so a taxpayer could have negative taxable income and a nol if his cpa knows the law and has a sharp pencil ). as wet behind the ears as xpert seems, i don't see how he can be critical anyone's track record.

 

[RyanChandler]

Wrong would be infusing those terribly- poor topline bulls of yours into the shorthorn gene pool.

The Bonus Depreciation allowance is only for qualified assets. You might want to check out what's considered 'qualified'

 

[GONEWEST]

"ok, XBAR, you are the smartest most educated most knowing person about accounting here...."

In ANY room containing two people of which he is one he is not the smartest person in the room.

 

[RyanChandler]

Lol dispute with facts.  You forget you told me your name in a message.  O the power of google. You're a washed up has been- really, a never was.