Flexible Rent - Page 5 - The Combine Forum
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post #41 of 53 (permalink) Old 02-15-2019, 01:34 AM
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What about a 50/50 share rent. Landlord supply the land. You supply the iron. All inputs and returns are shared 50/50.
We had two landlords do this for 40 years with us, It was great during the terrible 80's decade. It is a pain tho when it comes to insurance and keeping all grain off their fields in its own bins, weather it fills the bin or not ect. and extra paperwork. We grossed 1000 an acre a few yrs ago on some sunflowers, usually 200=400 in our area, and wow would that have been a tough share to swallow had it been 50/50

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post #42 of 53 (permalink) Old 02-15-2019, 06:44 PM
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Works good for the renter if the number of bushels are right. I wouldn’t bet it passes the smell test with Revenue Canada as far as it qualifying for farm income! Has anyone tested that?
Absolutely it passes RC requirements, why wouldn't it? Was many doing this, was even being advised by some tax outfits and still is. How is it ultimately any different than receiving a percentage or share of a sharecrop arrangement? Only diff is simply both parties know exactly where they are at, no arguing about inputs, number of acres, or how anything was done, and it gives the renter full freedom to do as he chooses. Landlord could sell or defer his payment however he wanted. Sometimes I would end up delivering the grain after new years, depended on their situation, working with each other was to each others mutual benefit. No where ever stated the barley had to grown on that particular land, as long as they had quota acres for barley back in those days that was needed, it didn't matter if the grain had come from Mars. I was first doing this back in the days of still needing permit books, if they didn't run their own book, then they piggybacked on mine. Cheques they got came right from the grain buyer or elevator. How could that possibly be classed as non eligible farm income?


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post #43 of 53 (permalink) Old 02-15-2019, 06:53 PM
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Look into it. Lots of accountants say it’s ok. CRA says not.
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post #44 of 53 (permalink) Old 02-15-2019, 07:25 PM
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Look into it. Lots of accountants say itís ok. CRA says not.
Exactly. My accountant says you pretty much need to prove you couldíve lost money to prove risk.

Crop share is only qualified as farming if you pay expenses and share management decisions on land. There has been CRA rulings on this.
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post #45 of 53 (permalink) Old 02-15-2019, 07:49 PM
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Look into it. Lots of accountants say itís ok. CRA says not.
Never really gave it a thought that they very well could have closed up some loop holes as I am speaking of something that I was doing 30 plus years ago at first, guess the last arrangement I had of this style would have been in 1998. I do know it was legal at that time, however if it has since changed, well then you guys would then be totally correct, and then I do aplogize for muddying the waters.
I do have personal knowledge from years ago when a relative challenged RC on rollover rules mid 90s and won, and at the time I was renting land from him under this arrangement and nothing changed afterwards. He won the fight against RC, PWC was representing him at the time as well.
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post #46 of 53 (permalink) Old 02-15-2019, 11:25 PM
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Absolutely it passes RC requirements, why wouldn't it? Was many doing this, was even being advised by some tax outfits and still is. How is it ultimately any different than receiving a percentage or share of a sharecrop arrangement? Only diff is simply both parties know exactly where they are at, no arguing about inputs, number of acres, or how anything was done, and it gives the renter full freedom to do as he chooses. Landlord could sell or defer his payment however he wanted. Sometimes I would end up delivering the grain after new years, depended on their situation, working with each other was to each others mutual benefit. No where ever stated the barley had to grown on that particular land, as long as they had quota acres for barley back in those days that was needed, it didn't matter if the grain had come from Mars. I was first doing this back in the days of still needing permit books, if they didn't run their own book, then they piggybacked on mine. Cheques they got came right from the grain buyer or elevator. How could that possibly be classed as non eligible farm income?
Wow, your amazing!
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post #47 of 53 (permalink) Old 02-15-2019, 11:25 PM
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With out reading this to much. Be sure it is not a one sided system when the land lord is certain to make money and the renter is certain to never make money. Both have to hurt when it hurts and both be happy when times are good. Then do not forget insurance and government payments. When I did crop share the idea of the land lord was that I would have less payment in bad times. In reality I made less because I only got my share of the insurance and government payments per acre. They did not share 100% of the expenses but did share 100% of the profits. I had to get out of that lease.
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post #48 of 53 (permalink) Old 03-13-2019, 12:17 AM
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The two sides of greed are one huge problem that's getting out of hand with cash rent these days...the greed of the guy trying to rent so he can have more acres, and the greed of the guy renting it out just going after the absolute highest price he can get. I was working on renting 400 acres for this year, started negotiating in July of last year and finally quit in November. It just turned into a pissing matching and I'll admit I was the last guy to bow out. But it started out the landlord wanted a 3 year lease then someone offered a 5 year so that's what he wanted all of a sudden. I said I'd do a 5 year and lock in a price for 3 years and then the last two years would be negotiable based on grain market values. He didn't like that, basically told me then if grain prices tank then he's screwed on rent going down. Well no **** buddy, but I need to protect myself too. Especially considering the price was getting pretty high and I had to take care of the repairs on the pivots and motors (Central Nebraska).

Most of my rent is shares at 60/40, and the only thing I pay 100% on is seed and cost to irrigate. Landlord owns the pivots and motor and takes care of repairs. And honestly I think that's the most fair of any deal around this area.

But I ended up not getting the ground and I got to see first hand what greed will do to a man. And a man that already has more money than anybody knows what do with already. He'd rather rent it to some Joe Blow that lives 50 miles away that he doesn't know, had never met, etc but came in and offered the highest price vs renting it to someone just down the road that he knows over a matter of a few hundred bucks. In the end I'm glad I didn't end up with it because the guy that farmed it before mined all the nutrients out of it and only fertilized when he put anhydrous on for corn and left it in horrible shape. And the price was getting high even for ground that was in good shape.
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post #49 of 53 (permalink) Old 03-13-2019, 10:49 AM
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I cannot imagine paying a $100 rent here. There have been way to many crop failures with flooding to pay that amount. Truth is though that people hear someone getting X amount and they want more. Mennonites have driven land prices and rents through the roof here and am wondering if it is worth the effort to compete. An endless supply of money seems to have flooded in here and landowners are selling or demanding high rent and getting it. I think the money tree the mennies have is part of the cartel in Mexico trying to launder money. Mennonites in Mexico were moving millions in drugs to the US from Mexico in furniture etc for yrs and yrs. They have 100s of millions of dollars to launder and what better way than to farm. Some of that family moved to Canada along the Sask and Alta border I saw on the Fifth Estate. Don't need to farm good to launder money. Better if you don't and allows you to launder more. I wish I had that problem lol. Might have to do like my buddy said. Sell the equipment and bins. Rent it out and sit back and make $150000 a yr and watch what happens. Millions of dollars have been trading here since their arrival. Lots of old farmers are cashing out.
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post #50 of 53 (permalink) Old 03-13-2019, 03:07 PM
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I cannot imagine paying a $100 rent here. There have been way to many crop failures with flooding to pay that amount. Truth is though that people hear someone getting X amount and they want more. Mennonites have driven land prices and rents through the roof here and am wondering if it is worth the effort to compete. An endless supply of money seems to have flooded in here and landowners are selling or demanding high rent and getting it. I think the money tree the mennies have is part of the cartel in Mexico trying to launder money. Mennonites in Mexico were moving millions in drugs to the US from Mexico in furniture etc for yrs and yrs. They have 100s of millions of dollars to launder and what better way than to farm. Some of that family moved to Canada along the Sask and Alta border I saw on the Fifth Estate. Don't need to farm good to launder money. Better if you don't and allows you to launder more. I wish I had that problem lol. Might have to do like my buddy said. Sell the equipment and bins. Rent it out and sit back and make $150000 a yr and watch what happens. Millions of dollars have been trading here since their arrival. Lots of old farmers are cashing out.
Really. Grow up and educate yourself. Most of these Mennonites have come back to get Canadian citizenship and create a better life for there kids. Most of them have parents that left as young children when the governments where forceing education on them.

The Mexican Mennonites know how to work and most arenít taking holidays half of the winter. Have had the opportunity to have more then a couple work for us and wouldnít hesitate to hire any in the future. I really donít think itís fair to criticize or throw them all under the bus because thereís a few bad apples in the bounce.

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