Farm?

[hunts_with_stick]

Ok, weird question. I have 12 acres. 30+ fruit trees I just planted. (Ohio)I do have a couple of old trees that will produce, Can I make myself a farm? apples won’t be ready for 5+ years, will make cider and hard cider and applesauc. Most likely will give it away to friends and family. I did buy a tractor and shed. Are there any tax advantages or anything I can use?

 

[buckdeer1]

I have some that previous owner got changed to ag with orchard

 

[FarmerDan]

That's a slippery issue. What do you mean when you ask, "Can I make myself a farm?" I struggled with the definition of a farm my entire professional life. If your asking if you can be classified a farm for taxation or other government consideration then you will need to consult with each agency/locality. Let's go down the road a bit. USDA defines a farm as "...any place that produced and sold—or normally would have produced and sold—at least $1,000 of agricultural products during a given year." If we go down the road a little further, and I'm only guessing at the specific reasons for your question, if you're wanting to participate in some federal and/or state program you'll probably need to get a farm number from FSA (USDA's Farm Service Agency). There's a definition of what constitutes a farm for that purpose. It's a little different. It's not quite as easy as asking for one - but almost. In my part of the world FSA gives out farm numbers like Santa giving out candy canes at Christmas. Here in Virginia for land use taxation (property tax relief) each county has different specifications that vary only slightly. Some require a USDA issued farm number AND other documentation. For other's a USDA farm number is sufficient. In Ohio I don't know. You should ask whomever collects your taxes.

 

[Natty Bumppo]

Ok, weird question. I have 12 acres. 30+ fruit trees I just planted. (Ohio)I do have a couple of old trees that will produce, Can I make myself a farm? apples won’t be ready for 5+ years, will make cider and hard cider and applesauc. Most likely will give it away to friends and family. I did buy a tractor and shed. Are there any tax advantages or anything I can use?

I am assuming all states are different. But simply owning a tractor and growing some apples does not make one a farmer. Here in Mass. you've have to have some kind of a product or crop...and you are only allowed losses 3 out of every 5 years. That crop could be dairy, wool, Christmas trees, maple syrup, apples, beef, cheese, vegetables, hay, etc. You get the idea. And you're not going top be able to write of $30,000 business expenses every year and then give away $50 worth of apple sauce.

Again, all states are different I am guessing. That's just how it generally works here in Mass. I do Christmas trees and forest products. Keeps me in ag status with fairly minimal work.

You're going to have to open a sole proprietorship, DBA, or LLC.

And yes, there are certain tax benefits. If a farm is in Chapter 61a taxes on the land are significantly reduced. You can write off farm expenses. Additionally, there may be various cost sharing grants you can also apply for.

But again, you're going to have to actually demonstrate that you're doing more than growing a few bushels of apples every year.

 

[hunts_with_stick]

Thanks! Good info. there Is more I’d like to do that I will,have to consider.

 

[356]

My first property was 13 acres, mostly wooded. The county classified the land (but not the cabin) as Ag (timber), providing some tax relief. All I had to do was ask and show pictures of the trees on the property.

Since I used the property for CCW classes back then, these were consider "hobby" income and expenses and I was able to use the hobby deduction. Later, I purchased additional acres are on a cattle lease. It was at that point I started filing farm taxes, as I was meeting or exceeding the $1000 income threshold.

If you get into an EQIP or similar wildlife or conservation program, you will likely be required to have a "Beginning Farmer" certification (good for 10 years). I would contact your local USDA office and see if any programs are available. The income from the cost-share may qualify for the tax deductions related to the operations of this property.

Of course, these posts are not legal advice, just information to help you in the right direction.

 

[buckdeer1]

I have planted walnut saplings for landowners to get timber ag and it helps if there is some sort of history,timber,crop ag,and even firewood in some states