Have an exit strategy if you’re not planning to stay in the dairy business.
First, decide how soon you need to make the move out of the business, suggests Sherrill Nott, Michigan State University extension ag economist and Tom Purdy, MSU extension farm management specialist.
Then, get a market-based appraisal of all assets. This gives you a realistic assessment of what someone would actually pay. Work these appraised values into a complete balance sheet that includes the current tax cost basis of all assets. Finish the balance sheet with a list of each loan contract and the security pledged for each loan.
Meet with a farm income tax consultant and get a precise estimate of what the federal and state income taxes would be on the proposed sale. Use this information to help make your final decision.
If the sale is going to finance your retirement, visit the following Web site for further suggestions: