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| You asked if there will ever be a large correction. Before the new administration took office, I would have advised also to proceed. But in the face of looming legislation, the answer is yes, and it’s coming sooner than most here realize or will admit to. Biden announced a couple days ago his desire to double the Cap gains rate, a campaign promise he intends to keep. The stock market did not like the announcement very much. He has a three legged stool, and intends to saw the legs off all three before all said and done. The above is the first leg, the second will be repeal of stepped up basis and/or implementation of the newly proposed STEP act, which is a transfer tax, which in a nutshell, would accomplish the same goal as elimination of stepped up basis, only even sooner. And the third leg is lowering the estate tax exemption back down to as low as 3.5 million/individual. Any single one of these if passed will be rough on appreciable assets, let alone, heaven forbid,all 3 are implemented. Eventually, in time,assets will reach what I’m going to refer to as a “tax equivalent valuation”. Farmers are all bulled up with these prices, but not many are capable of capitalizing on them cuz their bins are empty. History has shown time and again these anomalies in grain prices are detrimental long term, and I see this time being no different. It won’t be long and grains will be back down to COP, or below. “But, but, it’s different this time!” B.S. It’s never any different. Long story short, I wouldn’t lose too much sleep agonizing over buying an asset near its all time highs. History has also shown more often than not, from a pure dollars and cents standpoint anyway, that’s a good time to be selling, not buying. (One of the best tax shelters available after the dust settles will actually require the asset be sold to avoid the tax. How’s that for a contradiction) Of course family business dynamics come into play to never sell, I, of all people, fully understand the desire to stand firm in the face of adversity. But if the patriarch didn't have his ducks in a row prior to Jan. 1, 2021, his options going forward will be much, much more difficult to avoid the draconian taxes if implemented. The result being lots and lots of land being forced sold just to pay the taxes. Edit too add; I once heard an old boy claim a guy could never lose money on hogs if he simply values the manure high enough.https://news.yahoo.com/biden-reportedly-plans-nearly-double-194759637. https://r.search.yahoo.com/_ylt=AwrC1THZrYJgHj0A3ivQtDMD;_ylu=Y29sbw...
Edited by Boone & Crockett 4/23/2021 07:14
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Young Farmer Land purchase questions
