OT- Best and worst year end purchases?

Dave from MN · Dec 30, 2011

As the 31st nears and famr incomes should have been high in weather cooperating areas, what are the best and worst "gotta spend some" purchases for the end of tax year?
This is not for advice, just for S's and G's.

IaGary · Dec 30, 2011

I prepaid most all of my input needs for next year.

And I bought another small farm. Don't help on taxes much though.

Gary

Hotflashjr · Dec 30, 2011

Worst would be a large new piece of equipment you DON'T need! I have seen a lot of guys do this just to be trying to sell a $200,000 loader or dozer the next year. Equipment you need is a good idea. As a loan officer/financial planner for farmers buying equipment to skip out on taxes is always a bad idea in my mind. Prepaying next years expenses is always the best choice. You never know what next year will bring and likely, costs are not going to go down SO much that you will be kicking yourself for prepaying. Most places offer a discount for prepaying and if you have a bad year you are not left with bills or no money to start the next year with. Paying taxes is not the worst thing that can happen. It sucks, wish they were not so high, but you can only find a way around it for so long before it will catch up to you.

F150Mustang · Dec 30, 2011

About the only "year end" purchase we made was to update a 60's vintage forklift with no brakes to a mid 90's TCM forklift. Not really for taxes, but we had been shopping for one most of the year and this came up and we jumped on it.

IaGary · Dec 30, 2011

Dave did you get a pickup bought?

What did you get?

I have been trading every 3 years for a 3 year old that a local guy trades in. F250 Regular cabs with rubber floors. I have traded 3 times with the same dealer for his truck. He traded this fall again. When I went to buy his trade in, 2 days after it was traded, the dealer told me it was already sold. Guess I need to find a new dealer. He knows I always want first chance at it.

I bought the first car this dealer sold back in 1973 when he purchased the dealership. Made the deal on Saturday and the old dealer said take the car and come in and settle for it on Monday morning with the new owner.

Like I said I can't believe he sold me out.

Gary

GordoSD · Dec 30, 2011

The dealer is paying wholesale for that truck and selling it to you at retail. Just bypass him and buy tghe truck from the local guy at a price a little over wholesale.

JDseller · Dec 30, 2011

I see guys buy thousands of dollars of stuff they really don't need just to get out of taxes. I have found that if I have to pay taxes then I have made some money. I will take the trade off and pay a few taxes.

JMS/.MN · Dec 30, 2011

I"ve done December pre-tax planning for years. Couple hundred bill is worth it. This year it calls for pre-pay on seed and fertilizer, and needed tires for one tractor. Sec 179 is a good tool, but doesn"t apply with too much passive income.........so the used skidloader I bought this Spring will be depreciated instead of expensed. Certainly a benefit to know that before Jan 1.

Dave from MN · Dec 30, 2011

No truck yet. Just couldnt bring myself to it. Still have to buy one, but will do it in the next few months, spend quite a bit of time driving different brands, modles, and see what I like for mileage, ride, and how bad I make it look sitting in it, then start working the salesman over. I prepaid more fert, paid some of 2013's rent's, and bought a few things for the chicken barn. If it isnt enoough, thats fine. Wife is kinda mad I didnt buy a truck, I went to Pauls Auction today looking over a combine and a couple tractors, figured if they were what I wanted, I may buy. Wife says my priorities are all messed up.

Anonymous-0 · Dec 30, 2011

The case of beer I bought for this weekend.

John (C-IL) · Dec 30, 2011

Number one on the list is fertilizer, chemicals, seed and fuel. Next is repair parts that are planned for the winter shop work. The one item that a lot of people forget is interest on loans that can be paid like your land mortgage or operating loans. Just be sure that the bank understands that you are paying the interest on your loan and the principle will be paid on the due date.

jackinok · Dec 30, 2011

For me prepaying was always high on the list,even if its just fence posts, wire and the like.Upgrading equipment ,replacing worn out and things also.I dont see anything wrong with using the tax laws to help yourself if its legal.Never was one much though to spend money just to shed/ hide it,but If its for real improvements I'll do it.Basically i use the chance to stock up on things that I'll be buying anyway.Pretty basic stuff for me most years,I like to keep parts on hand,set of front and rear tires,oil,fluids,all get stocked up on,seed, fertilizer,feed,basic stuff mostly that i can store on farm or prepay and pickup as needed.One thing i do is pre pay electric bills and things.I have so many meters at different places its hard to keep track of them all each month so i will simply prepay so much money on each account. Some places will have two or three electric meters that seldom go over the min charge and you can pretty much pay all those in advance. Dont store any diesel anymore but i used to fill tanks. like I say very basic for me.Wife wanted to buy a new pickup this fall,but when i looked at the price of them i about choked!the other five are still running well so I think I'll pass for a while and try to find a deal come spring LOL

Anonymous-0 · Dec 30, 2011

Drove 2 hours one way yesterday to buy a 5 ton Beebe Bros manual winch for $350, that is my best buy to end the year on. Was offered $500 for it on the ride back when I stopped at a store, told the guy no thanks cause I had been looking for one for quite awhile.

DeltaRed · Dec 30, 2011

I agree with that idea wholeheartedly!!Never could understand why guys spend (tens of)thousands of dollars just get out of a(few) thousand dollars in taxes.

Hoofer B · Dec 30, 2011

I bought two 2006 IH 9400 semis W/ cummins and 72" sleepers. I wrote the check out yesterday.

Dave from MN · Dec 30, 2011

I paid my operating loan and interest off 100% a couple weeks ago. So glad to be rid of it.

oldtanker · Dec 30, 2011

Dave your priorities are alright, you don't make money on a pickup when you are farming. Yea you should have a decent truck but a decent tractor or combine is way more important!

Rick

barnE · Dec 30, 2011

Didn't buy anything because I didn't need anything. Same always. Money don't burn holes in my pockets. Dave

Anonymous-0 · Dec 30, 2011

I wish you could convince my wife that a different combine or tractor would make more sense than another "going to town" vehicle. She just doesn't see it.

Rick Kr · Dec 30, 2011

Didn"t need a thing this year. Thats good, means nothing broke. Waiting to order my 2012 tree stock in Feb/March timeframe when the discounts are better than now.

So I celebrated all the money I saved with a six pack of Genesee Cream Ale. I know, I"m cheap.

Rick

jm. · Dec 30, 2011

Everybody knows I trade ever two years and try to do that to me but in Tennessee you only pay sales tax on the diffrence. Lots better deal for me to trade in the 25 thousand dollar vehicle then let them invoice it to my neighbor for what they allowed me.. And I do not tade on whosale.
Pretty well know what my tradins are worth retail.

Clodbuster · Dec 30, 2011

I updated several smaller things here and built a shed as we lost another rented shed. It is hard to find a used tractor on any lot in central NE. Have salesmen in local stores that won't even take time to price something for me, and I am in their stores buying parts all of the time. Oh well, I found some strangers that gave me their full attention and made some sales!!!!

donjr · Dec 30, 2011

Bought a new tedder and squeeze chute this year, and a new bull. Paid off this years fertilizer and chemical bill, and next year's seed. 14 weeks without rain this past summer didn't help our bottom line- I suppose I ought to be grateful I don't live in Texas. At least we still have a bottom line.

OT- Best and worst year end purchases?

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