Farm Equipment

Defer Taxes When Selling Your
Farm-Machinery And Equipment!

(Listen Here 6:22 min)

Farm-machinery and equipment holds it's value - which can result in heavy-taxation when selling...

Before you sell your farm equipment, be sure to make the proper-arrangements with an experienced qualified intermediary FIRST!

You want the transaction to be treated as a "trade" or "exchange" (rather than a sale and repurchase) to be sure that you qualify for the maximum tax-savings.

Like-Kind Requirement: Your exchange has to be of like-kind (or in this case "like-class") property. Non real estate (personal property) used in a farming-business is listed in one single Product Class for farm-machinery and equipment. 

1031 Tip: Farmers have an incredible advantage because nearly all of their equipment is grouped under just ONE product-class, which allows them a great deal of flexibility in selecting their like-kind replacement property.

This NAICS Product Class 333111 includes:

• Presses, farm-type, manufacturing

• Rakes, hay, manufacturing

• Rotary hoes manufacturing

• Rotary tillers, farm-type, manufacturing

• Seeders, farm-type, manufacturing

• Shears, powered, for use on animals, manufacturing

• Sheep shears, powered, manufacturing

• Shredders, farm-type, manufacturing

• Sod harvesting machines manufacturing

• Sprayers and dusters, farm-type, manufacturing

• Spreaders, farm-type, manufacturing

• Stalk choppers (i.e., shredders) manufacturing

• Tobacco harvester machines manufacturing

• Tomato harvesting machines manufacturing

• Tractors and attachments, farm-type, manufacturing

• Transplanters, farm-type, manufacturing

• Tree shakers (e.g., citrus, nut, soft fruit) manufacturing

• Wagons, farm-type, manufacturing

• Weeding machines, farm-type, manufacturing

• Windmills, farm-type, manufacturing 

45 Day Identification Requirement: Your replacement-farm equipment must be unambiguously designated or identified by you no later than 45 days after the date of the transfer of your relinquished-farm equipment.  This means that you must identify (in writing) your new replacement-farm equipment by make, serial number, or other unambiguous designation (See 3 Property Identification Rule, 200% rule, 95% rule) to satisfy the treasury-regulations.

180 Day Exchange Requirement: You must actually receive the benefits and burdens of ownership to your new-farm equipment no later than 180 days after the date of the transfer of your old relinquished-farm equipment. This means that you have to actually receive your new replacement-farm equipment within the 180 day exchange-period.

Value Requirement: In order to defer all of the gain, your replacement-farm equipment typically should be equal or greater in value than your old relinquished-farm equipment, and all of your equity (or proceeds) from the sale of your old relinquished-farm equipment should be reinvested into your new replacement-farm equipment.

The sale of farm equipment can be very costly for farmers if they do not structure their sale properly.  However, by using a personal property exchange, the sale can be treated as an "exchange" that is Not Taxable!

Call Me Directly (Toll Free) At 1-888-308-1031 For A Free Consultation - Or Click Here To Start Your Exchange Online Today!