Smart Financial Strategies for Farmers: Incorporation, Budgeting & Real Estate Insights

The Spring 2020 issue of Intelligent Farmer delivers actionable guidance on incorporating farm businesses, mastering financial planning, and navigating real estate markets. Here’s a snapshot of key insights:

Click here to download the full Spring 2020 issue of Intelligent Farmer today

Incorporating Your Farm Business: A Step-by-Step Guide

• Choose the Right Year-End: Select a fiscal year (e.g., October) to align with seasonal cash flows and optimize tax planning.
• Incorporation Date: Time your incorporation to minimize tax liabilities, especially around significant income events.
• Company Structure: Opt for a named company over a numbered one for marketing and administrative ease.
• Share Classes: Use special and common shares to separate equity, control, and dividends for flexible tax planning.
• Asset Transfer: Carefully transfer assets (excluding accounts receivable) and ensure proper government filings.

Financial Resilience: Budgeting & Saving

• Avoid Debt Traps: Compare outright purchases vs. monthly payments to prevent long-term financial drains.
• Prioritize Savings: Build an emergency fund first, then save for retirement, education, or business growth.
• Compound Wealth: Leverage compound interest by investing early and avoiding high-interest debt.

2020 Real Estate Outlook

• Hog Market: Improved trade relations with China and African Swine Fever impacts promise strong demand.
• Dairy Farms: Shortage of ongoing operations makes 2020 a seller’s market, with USMCA compensation funds influencing production.
• Chicken Farms: Moderate growth in consumption supports demand for quota and functional barns.
• Land Prices: Stable with modest increases, though cash crop farms may take longer to sell based on location.

Tax-Smart Vehicle Classification

• Class 10 vs. Class 10.1: Properly classify vehicles to maximize depreciation write-offs (up to $30,000 for Class 10.1) and avoid standby charges.
• Logbook Essentials: Document business usage to support classifications and minimize tax risks.

Don’t miss the full issue.

Read the Spring 2020 edition of Intelligent Farmer for deeper insights into incorporation, financial planning, real estate trends, and tax strategies to strengthen your farm’s future.

RBC Dominion Securities Inc. | Lorkovic DeKoning Wealth Management