|
| Kinda what I was thinking, its going to be impossible to stay out of the 28% bracket and accumulate working capital(cash) for a downpayment and payments on $8-10,000/acre land. 150acres x $10,000 = $1,500,000 in post tax income. at a 30% tax rate you'd need $2,000,000 in taxable income. How are you going to get there netting $50,000/year? This attitude of never wanting to pay taxes is why some farmers have enough equipment and stuff to look like a consignment sale and no cash. They have been led to believe that being tax deductible is justification enough to buy something.
Its can be more difficult to buy land at low interest rates that higher ones. With high interest rates you get to deduct the interest you pay on the mortgage. And a 20 year note at 4% doesn't accumulate as much interest as a 10% note, so there is more principal to pay(not tax deductible), and less interest(tax deductible) with a low rate. This assumes that both examples would have the same annual payment size. So you'd pay less for land at high interest rates. | |
|
2013 rent bids
