| workinonjunk - 3/3/2016 11:23
Yep....I realize those prices are achievable..........what happens if we have $2.50 corn this fall when the combines roll. $2.50 corn is also achievable....that is 1.30 less than the 3.80 used in the cashflows. Then what happens???
I would hate to be one of those guys that 179'ed a couple million dollars worth of equipment. The income taxes they will pay from here on out would break me.
Totally my opinion here, if $2.50 this fall an awful lot of them will have good crop insurance and unless they grow 300 bushel corn they will get a payment, possibly a big one. They would probably get a ARC payment and they would put the crop in the bin and seal it for a little income. Not a great scenario but neither were the 80's, I saw it in color. Can well remember raising 100 bushel corn and selling it for $1.57. Not much income, not as much expense as now I realize, when it's all negative it doesn't matter.
As far as the 179, believe it or not there are people who have wrote it off and paid for it. Taxes probably are not going to be an issue for a while for most. I have enough depreciation coming that I really have to buy nothing for next 5 years. The ones who took all the 179 and paid the bare minimum or nothing on machinery, well that's not going to work out so well. Never has been a good plan, probably never will. Tax man told me a lot of years ago, never depreciate something you haven't paid for. |
talked to banker yesterday
