When it comes time to purchase replacement machinery, do you simply trade in the machinery to the dealer, or do you try and sell the machinery yourself? Sure, you might be able to get a higher price by putting up a for sale sign, but one expert notes that you need to consider the tax consequences as well.
Nate Eldefson, with the Illinois Farm Business Farm Management Association, writes recently: “One thing that is often not thought of is the tax advantages that may be realized via the outright sale of your existing piece.”
He provides a good run-down of the potential tax benefits.
Of course, you should always work with your tax professional, but it is something to keep in mind…especially if you are in the market to buy.
So when it comes to buying new machinery, do you consult with your tax professional before buying?