December 31, 2025 • 19 mins
American Family Farmer with Doug Stephan welcomes Kevin Channell, principal owner of Farm & Forest Business & Tax Services, for an insightful conversation about the financial realities facing today’s farmers, foresters, and rural business owners.
Kevin brings a rare dual perspective to his work—combining firsthand farming experience with deep expertise in business analysis, valuations, and farm-specific tax strategy. Before advising others, Kevin and his wife, Laura, owned and operated Your Farm in Vermont, producing and selling food directly to retail and wholesale markets for seven years. That experience, along with raising a family and eventually transitioning the farm to new owners, gave Kevin a clear understanding of how difficult it can be for farmers to step back and see the full financial picture while managing day-to-day operations.
Today, Kevin continues to live the realities of agriculture as a co-owner of Whiskey Run Wagyu in southern Indiana, where his family raises Wagyu beef cattle and operates a farm stay near Louisville, Kentucky. At the same time, he helps farm and forest owners across the country gain clarity through objective business assessments, enterprise analysis, business valuations, and proactive tax planning.
In this episode, Doug and Kevin discuss why many farmers struggle to evaluate profitability, the importance of third-party financial analysis, how business valuations play a critical role in succession and transition planning, and why year-round tax strategy (not last-minute filing) can make or break a farm’s financial future.
Whether you’re a multigenerational farmer, a new landowner, or planning the next phase of your operation, this conversation offers practical insight to help you make informed, confident decisions for your farm and family.
Website: AmericanFamilyFarmerShow.com
Social Media: @GoodDayNetworks
Kevin brings a rare dual perspective to his work—combining firsthand farming experience with deep expertise in business analysis, valuations, and farm-specific tax strategy. Before advising others, Kevin and his wife, Laura, owned and operated Your Farm in Vermont, producing and selling food directly to retail and wholesale markets for seven years. That experience, along with raising a family and eventually transitioning the farm to new owners, gave Kevin a clear understanding of how difficult it can be for farmers to step back and see the full financial picture while managing day-to-day operations.
Today, Kevin continues to live the realities of agriculture as a co-owner of Whiskey Run Wagyu in southern Indiana, where his family raises Wagyu beef cattle and operates a farm stay near Louisville, Kentucky. At the same time, he helps farm and forest owners across the country gain clarity through objective business assessments, enterprise analysis, business valuations, and proactive tax planning.
In this episode, Doug and Kevin discuss why many farmers struggle to evaluate profitability, the importance of third-party financial analysis, how business valuations play a critical role in succession and transition planning, and why year-round tax strategy (not last-minute filing) can make or break a farm’s financial future.
Whether you’re a multigenerational farmer, a new landowner, or planning the next phase of your operation, this conversation offers practical insight to help you make informed, confident decisions for your farm and family.
Website: AmericanFamilyFarmerShow.com
Social Media: @GoodDayNetworks
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The American Family Farmer podcast, sponsored in part by Caldron,
The Safe, proven Way to lose weight. Check it all
out at toploss dot com. I'm Doug Stephan. This is
the American Family Farmer. We're going to spend some time
with Kevin Channel, who is the principal of Farm and
Forest Business and Tax Services down in Prospect, Kentucky. I
(00:22):
thought this would be an appropriate way for us to
spend some time the end of the year people preparing
their taxes for the year, or at least they are
to be started, and maybe if you're really good, you
will have kept good records through the year. I know
that's always a task for me.
Speaker 2 (00:37):
What do you have?
Speaker 1 (00:38):
We've got lots of records, but who's got them in order?
So Kevin's going to help us with some ideas along
that line.
Speaker 2 (00:46):
Are you a farm guy, Kevin?
Speaker 1 (00:47):
Is that how you got to focus on farm business?
Speaker 3 (00:50):
Here? It is?
Speaker 4 (00:52):
Yes, I am a farm guy. I have a combination
of crop farming and livestock production in my background, and
I'm currently raising beef cattle as well. So been active
for over twenty years and come from a farm family.
Speaker 1 (01:09):
So as a tax guy, a business guy, did you
train in school. You an accountant public, you a certified
public accountant.
Speaker 2 (01:18):
What's your background educationally?
Speaker 4 (01:21):
Yeah, no, I'm not a CPA. Working on getting my
EA and becoming an enrolled agent with the IRS, but
not finished with all the testing yet.
Speaker 3 (01:30):
I'm just a tax preparer, and my background.
Speaker 4 (01:34):
Is I've got some business administration background background and graduate
studies and economics as well, and was a loan officer
for Farm Credit for a number of years. Learned tax
side of farm a lot there through their training.
Speaker 2 (01:51):
Right, So that makes a lot of sense.
Speaker 1 (01:52):
So your insight into the intricacies of how banks work,
of how finance works, of how the i R works
are probably a good positive way for people to understand
what's going on. Nobody really understands tax strategy anyway. I've
found over the years of filing tax returns. I don't
do it myself. I have somebody who's done at the
(02:13):
same firms. I'm doing it for forty some odd years,
and I look at the return and it's like a
telephone book and the only thing I know is I've
told them to answer any possible question before it's asked.
So you don't have any anybody knock on right, or
does this mean or you as more money that kind
of stuff. I think if you just prepare a complete
(02:37):
return and report, I'm.
Speaker 2 (02:39):
Just this is how I do it.
Speaker 1 (02:40):
I report every penny that I make and I take
every single deduction that this person can find for me.
Speaker 2 (02:47):
I just think that's.
Speaker 1 (02:48):
Is that a good philosophy? Is that straightforward? Or how
is that in your mind as you hear me explain it.
Speaker 3 (02:53):
Oh?
Speaker 4 (02:54):
Absolutely, keeping track of your income and expenses. Having a
nice system sure does tax se is a lot easier
on everybody and keeps you right with the irs.
Speaker 2 (03:04):
So I didn't tell you.
Speaker 1 (03:05):
I didn't say I had a nice system. I just
said I keep all the records. There's a large box
that goes to the tax preparer at some point during
the spring, and that's where it comes from. So but
I'm sure if somebody came into you and.
Speaker 2 (03:23):
Well, I want to really pursue this.
Speaker 1 (03:25):
Somebody walks into your office there in Prospect Kentucky and
says I need help.
Speaker 2 (03:31):
I want you to take us from.
Speaker 1 (03:33):
The beginning to how you would handle a new client,
so that perhaps that will help people understanding, you know,
what either they're doing right or what they may want
a transition to as things changed, and they are they
do change. Certainly do all right, So stand by for
more of Kevin Channel from Farm and Forest, Business and
(03:56):
Tax Services. This is the American Family Farmer. Elizabeth Miller
comes to us from the folks at Caltron. This is
the time of year when I advise people to be defensive.
The best defense is a good offense. So I say
to those of you who are eating well Thanksgiving, Christmas,
(04:17):
New Year's the best way to not gain weight is
to get on Caldron now and not wait until you've
already put the weight on.
Speaker 5 (04:25):
Well.
Speaker 6 (04:25):
You know, I know a lot of people would just
expect to gain weight over the holidays and then they
want to start January on losing it. But like you said,
if you're taking Caldron, not only are you going to
be losing weight during the holidays, but you're going to
be having more energy to get things done. And who
doesn't need that during the holiday season.
Speaker 1 (04:42):
One of the best ways of getting the best out
of Caltron is as you check out to use the
DOUG code DOUG on all orders. You'll be able to
have free shiving and you also get the best deal
at that moment, no matter what it is, you're taking
care of. Use Doug at toploss dot com. Back on
(05:06):
the American Family Farmer. So they have Kevin Channel, who
is the owner of the farm as far as business
and tax service, trying to put us on the right path,
straight and narrow. So, as I said before, he has
some hands on farming experience. Or he actually said that.
What do you say to somebody who walks into your
(05:27):
office and says, I'm lost, I don't know what to do.
Speaker 2 (05:33):
IRS is after me? How do you start with them?
Speaker 4 (05:36):
Well, that last bit, the IRS is after me. I'd
be curious to see any letters that they received. But
short of that, if that's not the case, you yet
they know they need some help. You know, you mentioned
a record keeping system. I think just understanding how they
keep records of income and expenses would be useful. We
talked a little bit about buckets. You said you had
a box, a shoe box. Any systems fine, it's bigger
(05:58):
than this, as long as you but as long as
you have a system of keeping track of your income
and expenses, ideally by category.
Speaker 3 (06:07):
Also mainly that's for you as an operator.
Speaker 4 (06:11):
Any operation needs to understand how to make decisions for
their business, and just keeping track of line items and
enterprises on your farm is really helpful to drive decision making.
So I would talk to them first about their record
keeping system and if there's room.
Speaker 3 (06:28):
For improvement, that'd be great.
Speaker 4 (06:29):
If there's room for growing in you know, your understanding
of financial metrics and those kind of things, then we
can talk, you know a little more on strategy as well,
capital investments, talk about return on investment, return on rate
of return, return on revenues, those kind of things we're
you know, there's a lot of tools you can use
for financial strategy, and then those those come into play
(06:51):
for tech strategy as well.
Speaker 1 (06:53):
All right, so let's say this person has come to
you and they are working hard, and they've got good
records and stuff, and you see some some things stand
out in terms of preparing taxes, but oftentimes people are
not thinking about how to plan ahead in terms of
(07:15):
purchases or how they do It's not just kind of
a grab your butt scenario. I know it is with
a lot of us, but there is also a need
it would seem to plan ahead, like when should I
you look at last year's tax return and maybe at
this point because there's still is time for you to
maybe buy some equipment to offset some tax liabilities or
(07:38):
things that you plan ahead for.
Speaker 2 (07:40):
What are you going to need this year?
Speaker 1 (07:41):
Is do you go into that or do you plan
with people as to how they ought to strategize for
the year so to lessen their tax burden.
Speaker 4 (07:51):
Yeah, we're conducting a lot of year end meetings right
now where we run off of twenty twenty four tax law.
Of course we tax twenty five is not decide or
finalized yet, but we run off of last year's taxes.
I mock up a return based on twenty five actuals,
and then we plan you know, different retirement investment strategies,
investment in your business, prepaid expenses. There's a lot of
(08:15):
ways to drive down your net income in a year
where you've made money. And so those those scenarios we
run out and give people information they need to make
good decisions. You know a lot of times they're going
to save once they do all their shopping on a
new piece of equipment or you know, a new herd
(08:36):
of cattle, or replacement effers, those.
Speaker 3 (08:39):
Kind of things.
Speaker 4 (08:40):
If they are looking at big expenditures, you're going to
save an additional fifteen to twenty percent potentially maybe even.
Speaker 3 (08:47):
More in the given calendar year.
Speaker 4 (08:50):
If you make that transaction, you'll save that additional in taxes.
So we do like to look at those scenarios first
and use Section one seventy nine any kind of bonus
appreciation available.
Speaker 1 (09:02):
And that's probably didn't Trump say at some point this
past year that he wanted to was talking about eliminating
the income tax. Guys like you might not like that
because they put you out of business. But I know
I have, pretty much for my entire radio career, which
is about sixty years of being on the air and
being around cows all my life.
Speaker 2 (09:23):
Thought that there is a better way.
Speaker 1 (09:25):
The income tax seems confiscatory to me, and a sales
tax would be much better to administer. I think, except
for guys like you, do you have strong feelings about
that one way or another.
Speaker 4 (09:36):
Just as an aside, if we eliminated income tax in
the US, I find something else to do in a heartbeat.
That's not a I'm not when to this system whatsoever.
Speaker 2 (09:47):
So you're in the cattle, you're.
Speaker 1 (09:48):
Raising cattle, and you've got an operation there what it's
called a farm stay you how do you just I'm
just interested in you and what you're doing on the farm.
What does it mean farm stay?
Speaker 4 (10:02):
Well, we've the farms we've been on tend to have
extra residential and you know, we have a small it
was the original farmhouse.
Speaker 3 (10:10):
We went through it and put in new bathroom, new.
Speaker 4 (10:14):
Floors, and allow you know, short term airbnb b RBO stays,
and we also have it there for our own personal guests,
family and such when they come into town for holidays.
But if the rental income is comparable and we can
still have it for our own use and use for
our family.
Speaker 2 (10:32):
So that's cool. Yeah, it's good tax planning, isn't it.
Speaker 4 (10:36):
Well, Schedule E income, you know, you aren't going to
pay self employment tax on Schedule E income, So that's
kind of a nice feature of having rentals.
Speaker 2 (10:45):
Yeah, right, exactly.
Speaker 1 (10:47):
Now there's all kinds of ways of limiting or being
smart about it, and so that's just I saw that
in that time. Well, maybe you'll tell a story, maybe
give us some folks ideas on what to do on
their fires.
Speaker 2 (11:00):
A lot of farms, as you're suggesting, have.
Speaker 1 (11:02):
Different buildings, out buildings, buildings that can be converted. There
are a lot of farmers now that I've talked to
you lately, that are offering sort of like a B
and B and you can come and work on the farm.
And instead of we pay you to work on the farm,
you pay us to come stay on.
Speaker 2 (11:17):
The farm, which is a kind of a yeah good idea.
Speaker 1 (11:23):
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Speaker 7 (11:36):
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(11:57):
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Speaker 5 (12:05):
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(12:26):
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Speaker 6 (12:27):
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(13:02):
gallon bonus.
Speaker 1 (13:03):
We're talking with a business person, a farmer, and somebody
who knows about taxes. Kevin Channel is the owner of
the Farm and Forest Business and Tax Services and his
website is Farm and Forest Services dot com Farmanforest Services
dot com. I'm going to send my son, who is
talking working with me on succession.
Speaker 2 (13:24):
Planning what do we do when I'm not around to
run the farm anymore?
Speaker 1 (13:28):
And I'm looking at a section of your website that
looks like it's very complete when it comes to succession planning.
How much of your business and how important is it?
You know you see in the trades all the time,
succession planning, succession plannings.
Speaker 2 (13:41):
You know, it's always the focus because.
Speaker 1 (13:43):
Farmers usually screw it up and the government has not
helped anybody with these big death taxes.
Speaker 2 (13:48):
So how does this are these pieces fit together, Kevin.
Speaker 4 (13:51):
Well, succession planning is part of your overall you know,
goal setting for finances. We talked about short term strategies
for year in planning for taxes, but all that kind
of folds into the five and ten year plan for
where you're headed. And you know, succession planning takes into
(14:11):
consideration what is the value of my business currently and
what do I need it to be in order for
it to be either bought or attractive to one of
my children to buy into. What kind of position do
we need to be in for selling our farm if
we're going to sell it, or you know, bringing in
(14:32):
a partner, bringing in a successor of sorts, and you know,
there's a lot of considerations that go into that in
each year, whether it determines you know, further investment in
the operation, if it involves you know, stacking in enterprise,
(14:53):
going vertical, going horizontal, buying the farm next door when
it comes available. There's a lot of decisions that come
up up and you really have to define those succession
plans and goals at an early early stage to be
able to make those decisions.
Speaker 1 (15:09):
Well, how often have you seen in your practice the
situation is so bad farmers not having planned well that
when they pass away, the liabilities are so great.
Speaker 2 (15:21):
That the family has to sell the farm.
Speaker 4 (15:23):
Well, that's very industry specific and a lot of times
we have seen some of that in the dairy farms
and such, when conditions have been rough for milk prices.
Speaker 3 (15:41):
And land prices down.
Speaker 4 (15:43):
I think everybody knows about the eighties and where folks
were getting out and they had to get out. We've
not seen as much of that, you know, fire sales
situation since but it can happen. It's industry specific and
very farms recific. Usually if they don't have a succession plan,
(16:04):
it could very well result in that.
Speaker 1 (16:06):
Yes, yep, So that's something to keep in mind as well,
folks that are listening to this. It's something that you
hear and read about all the time, and that's because
it's important and it becomes a factor in holding onto
the farm frankly and making farm. You know, I went
through a bunch of stats for the audience a couple
of times in the most recent month of this broadcast.
(16:27):
How many people are on the farm, how many people
have left the farm. Going back to the nineteen twenties,
when we had a population of one hundred and five
million and the average acreage on farms one hundred and
forty eight acres, there were six million, four hundred and
fifty four thousand farms and twenty seven percent of the
of the American population were farmers. And you fast forward
(16:50):
to twenty twenty and we only we have a population
of three hundred plus million. The farm population is just
barely too much million. One point six percent of those
people on the labor force, work on the farm. The
number of farms has gone from six and a half
million to two just bailure over two million, and that
(17:12):
kind of stuff. When you look at that and understand
what's going on on the farm, it is really a
very good picture. And maybe he's a little philosophy involved
here on your part, because you see a lot of this. Kevin,
what's the future of farming in America?
Speaker 4 (17:28):
Well, if history says anything about the future, it's consolidation.
The GDP you know of agriculture has not gone down
one bit, it's increased significantly, while the number of farms
have gone down as you described. So when you look
at it from an economic standpoint, that means farms are
(17:49):
getting bigger and there's less of them. That's both, you know,
both a challenge and an.
Speaker 3 (17:57):
Opportunity, right for today's farmers.
Speaker 1 (18:00):
Well, you've presented us with lots of opportunity, lots of
good thought. I'm guessing that some of the people listening
to this program, even if they're not in your backyard,
I might to be in touch with you. The website
again for Kevin is Farm and Forest Services dot com,
Farminforest Services dot Com. Kevin Channel, who is from that
company here helping us with tax ideas, succession ideas, and
(18:24):
operating a farm from this side of the street pretty much.
Thanks very much, Kevin, Happy New Year. Appreciate your being here.
Speaker 3 (18:29):
Thanks Doug, I appreciate your time.
Speaker 1 (18:31):
Elizabeth Miller comes to us from the folks at Caldron.
This is the time of year when I advise people
to be defensive. The best defense is a good offense.
So I say to those of you who are eating
well Thanksgiving, Christmas, New Year's the best way to not
gain weight is to get on Caldron now and not
(18:52):
wait until you've already put the weight on.
Speaker 5 (18:55):
Well.
Speaker 6 (18:55):
You know, I know a lot of people would just
expect to gain weight over the holidays and then they
want to start Jane worry, I'm losing it. But like
you said, if you're taking Caldron, not only are you
going to be losing weight during the holidays, but you're
going to be having more energy to get things done.
And who doesn't need that during the holiday season.
Speaker 1 (19:11):
One of the best ways of getting the best out
of Caltron is as you check out to use the
Doug code DOUG on all orders. You'll be able to
have free shipping, and you also get the best deal
at that moment, no matter what it is you're taking
care of.
Speaker 2 (19:26):
Use Doug at toplaws dot com.
Speaker 6 (19:28):
This program was produced at Bobksound and Recording. Please visit
bobksound dot com.
Speaker 1 (19:34):
The American Family Farmer podcast sponsored in part by Caldron,
which is the safe way for you to lose weight
and keep it off.
The American Family Farmer podcast, sponsored in part by Caldron,
The Safe, proven Way to lose weight. Check it all
out at toploss dot com. I'm Doug Stephan. This is
the American Family Farmer. We're going to spend some time
with Kevin Channel, who is the principal of Farm and
Forest Business and Tax Services down in Prospect, Kentucky. I
(00:22):
thought this would be an appropriate way for us to
spend some time the end of the year people preparing
their taxes for the year, or at least they are
to be started, and maybe if you're really good, you
will have kept good records through the year. I know
that's always a task for me.
Speaker 2 (00:37):
What do you have?
Speaker 1 (00:38):
We've got lots of records, but who's got them in order?
So Kevin's going to help us with some ideas along
that line.
Speaker 2 (00:46):
Are you a farm guy, Kevin?
Speaker 1 (00:47):
Is that how you got to focus on farm business?
Speaker 3 (00:50):
Here? It is?
Speaker 4 (00:52):
Yes, I am a farm guy. I have a combination
of crop farming and livestock production in my background, and
I'm currently raising beef cattle as well. So been active
for over twenty years and come from a farm family.
Speaker 1 (01:09):
So as a tax guy, a business guy, did you
train in school. You an accountant public, you a certified
public accountant.
Speaker 2 (01:18):
What's your background educationally?
Speaker 4 (01:21):
Yeah, no, I'm not a CPA. Working on getting my
EA and becoming an enrolled agent with the IRS, but
not finished with all the testing yet.
Speaker 3 (01:30):
I'm just a tax preparer, and my background.
Speaker 4 (01:34):
Is I've got some business administration background background and graduate
studies and economics as well, and was a loan officer
for Farm Credit for a number of years. Learned tax
side of farm a lot there through their training.
Speaker 2 (01:51):
Right, So that makes a lot of sense.
Speaker 1 (01:52):
So your insight into the intricacies of how banks work,
of how finance works, of how the i R works
are probably a good positive way for people to understand
what's going on. Nobody really understands tax strategy anyway. I've
found over the years of filing tax returns. I don't
do it myself. I have somebody who's done at the
(02:13):
same firms. I'm doing it for forty some odd years,
and I look at the return and it's like a
telephone book and the only thing I know is I've
told them to answer any possible question before it's asked.
So you don't have any anybody knock on right, or
does this mean or you as more money that kind
of stuff. I think if you just prepare a complete
(02:37):
return and report, I'm.
Speaker 2 (02:39):
Just this is how I do it.
Speaker 1 (02:40):
I report every penny that I make and I take
every single deduction that this person can find for me.
Speaker 2 (02:47):
I just think that's.
Speaker 1 (02:48):
Is that a good philosophy? Is that straightforward? Or how
is that in your mind as you hear me explain it.
Speaker 3 (02:53):
Oh?
Speaker 4 (02:54):
Absolutely, keeping track of your income and expenses. Having a
nice system sure does tax se is a lot easier
on everybody and keeps you right with the irs.
Speaker 2 (03:04):
So I didn't tell you.
Speaker 1 (03:05):
I didn't say I had a nice system. I just
said I keep all the records. There's a large box
that goes to the tax preparer at some point during
the spring, and that's where it comes from. So but
I'm sure if somebody came into you and.
Speaker 2 (03:23):
Well, I want to really pursue this.
Speaker 1 (03:25):
Somebody walks into your office there in Prospect Kentucky and
says I need help.
Speaker 2 (03:31):
I want you to take us from.
Speaker 1 (03:33):
The beginning to how you would handle a new client,
so that perhaps that will help people understanding, you know,
what either they're doing right or what they may want
a transition to as things changed, and they are they
do change. Certainly do all right, So stand by for
more of Kevin Channel from Farm and Forest, Business and
(03:56):
Tax Services. This is the American Family Farmer. Elizabeth Miller
comes to us from the folks at Caltron. This is
the time of year when I advise people to be defensive.
The best defense is a good offense. So I say
to those of you who are eating well Thanksgiving, Christmas,
(04:17):
New Year's the best way to not gain weight is
to get on Caldron now and not wait until you've
already put the weight on.
Speaker 5 (04:25):
Well.
Speaker 6 (04:25):
You know, I know a lot of people would just
expect to gain weight over the holidays and then they
want to start January on losing it. But like you said,
if you're taking Caldron, not only are you going to
be losing weight during the holidays, but you're going to
be having more energy to get things done. And who
doesn't need that during the holiday season.
Speaker 1 (04:42):
One of the best ways of getting the best out
of Caltron is as you check out to use the
DOUG code DOUG on all orders. You'll be able to
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(05:06):
the American Family Farmer. So they have Kevin Channel, who
is the owner of the farm as far as business
and tax service, trying to put us on the right path,
straight and narrow. So, as I said before, he has
some hands on farming experience. Or he actually said that.
What do you say to somebody who walks into your
(05:27):
office and says, I'm lost, I don't know what to do.
Speaker 2 (05:33):
IRS is after me? How do you start with them?
Speaker 4 (05:36):
Well, that last bit, the IRS is after me. I'd
be curious to see any letters that they received. But
short of that, if that's not the case, you yet
they know they need some help. You know, you mentioned
a record keeping system. I think just understanding how they
keep records of income and expenses would be useful. We
talked a little bit about buckets. You said you had
a box, a shoe box. Any systems fine, it's bigger
(05:58):
than this, as long as you but as long as
you have a system of keeping track of your income
and expenses, ideally by category.
Speaker 3 (06:07):
Also mainly that's for you as an operator.
Speaker 4 (06:11):
Any operation needs to understand how to make decisions for
their business, and just keeping track of line items and
enterprises on your farm is really helpful to drive decision making.
So I would talk to them first about their record
keeping system and if there's room.
Speaker 3 (06:28):
For improvement, that'd be great.
Speaker 4 (06:29):
If there's room for growing in you know, your understanding
of financial metrics and those kind of things, then we
can talk, you know a little more on strategy as well,
capital investments, talk about return on investment, return on rate
of return, return on revenues, those kind of things we're
you know, there's a lot of tools you can use
for financial strategy, and then those those come into play
(06:51):
for tech strategy as well.
Speaker 1 (06:53):
All right, so let's say this person has come to
you and they are working hard, and they've got good
records and stuff, and you see some some things stand
out in terms of preparing taxes, but oftentimes people are
not thinking about how to plan ahead in terms of
(07:15):
purchases or how they do It's not just kind of
a grab your butt scenario. I know it is with
a lot of us, but there is also a need
it would seem to plan ahead, like when should I
you look at last year's tax return and maybe at
this point because there's still is time for you to
maybe buy some equipment to offset some tax liabilities or
(07:38):
things that you plan ahead for.
Speaker 2 (07:40):
What are you going to need this year?
Speaker 1 (07:41):
Is do you go into that or do you plan
with people as to how they ought to strategize for
the year so to lessen their tax burden.
Speaker 4 (07:51):
Yeah, we're conducting a lot of year end meetings right
now where we run off of twenty twenty four tax law.
Of course we tax twenty five is not decide or
finalized yet, but we run off of last year's taxes.
I mock up a return based on twenty five actuals,
and then we plan you know, different retirement investment strategies,
investment in your business, prepaid expenses. There's a lot of
(08:15):
ways to drive down your net income in a year
where you've made money. And so those those scenarios we
run out and give people information they need to make
good decisions. You know a lot of times they're going
to save once they do all their shopping on a
new piece of equipment or you know, a new herd
(08:36):
of cattle, or replacement effers, those.
Speaker 3 (08:39):
Kind of things.
Speaker 4 (08:40):
If they are looking at big expenditures, you're going to
save an additional fifteen to twenty percent potentially maybe even.
Speaker 3 (08:47):
More in the given calendar year.
Speaker 4 (08:50):
If you make that transaction, you'll save that additional in taxes.
So we do like to look at those scenarios first
and use Section one seventy nine any kind of bonus
appreciation available.
Speaker 1 (09:02):
And that's probably didn't Trump say at some point this
past year that he wanted to was talking about eliminating
the income tax. Guys like you might not like that
because they put you out of business. But I know
I have, pretty much for my entire radio career, which
is about sixty years of being on the air and
being around cows all my life.
Speaker 2 (09:23):
Thought that there is a better way.
Speaker 1 (09:25):
The income tax seems confiscatory to me, and a sales
tax would be much better to administer. I think, except
for guys like you, do you have strong feelings about
that one way or another.
Speaker 4 (09:36):
Just as an aside, if we eliminated income tax in
the US, I find something else to do in a heartbeat.
That's not a I'm not when to this system whatsoever.
Speaker 2 (09:47):
So you're in the cattle, you're.
Speaker 1 (09:48):
Raising cattle, and you've got an operation there what it's
called a farm stay you how do you just I'm
just interested in you and what you're doing on the farm.
What does it mean farm stay?
Speaker 4 (10:02):
Well, we've the farms we've been on tend to have
extra residential and you know, we have a small it
was the original farmhouse.
Speaker 3 (10:10):
We went through it and put in new bathroom, new.
Speaker 4 (10:14):
Floors, and allow you know, short term airbnb b RBO stays,
and we also have it there for our own personal guests,
family and such when they come into town for holidays.
But if the rental income is comparable and we can
still have it for our own use and use for
our family.
Speaker 2 (10:32):
So that's cool. Yeah, it's good tax planning, isn't it.
Speaker 4 (10:36):
Well, Schedule E income, you know, you aren't going to
pay self employment tax on Schedule E income, So that's
kind of a nice feature of having rentals.
Speaker 2 (10:45):
Yeah, right, exactly.
Speaker 1 (10:47):
Now there's all kinds of ways of limiting or being
smart about it, and so that's just I saw that
in that time. Well, maybe you'll tell a story, maybe
give us some folks ideas on what to do on
their fires.
Speaker 2 (11:00):
A lot of farms, as you're suggesting, have.
Speaker 1 (11:02):
Different buildings, out buildings, buildings that can be converted. There
are a lot of farmers now that I've talked to
you lately, that are offering sort of like a B
and B and you can come and work on the farm.
And instead of we pay you to work on the farm,
you pay us to come stay on.
Speaker 2 (11:17):
The farm, which is a kind of a yeah good idea.
Speaker 1 (11:23):
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(11:57):
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Speaker 5 (12:05):
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(13:02):
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Speaker 1 (13:03):
We're talking with a business person, a farmer, and somebody
who knows about taxes. Kevin Channel is the owner of
the Farm and Forest Business and Tax Services and his
website is Farm and Forest Services dot com Farmanforest Services
dot com. I'm going to send my son, who is
talking working with me on succession.
Speaker 2 (13:24):
Planning what do we do when I'm not around to
run the farm anymore?
Speaker 1 (13:28):
And I'm looking at a section of your website that
looks like it's very complete when it comes to succession planning.
How much of your business and how important is it?
You know you see in the trades all the time,
succession planning, succession plannings.
Speaker 2 (13:41):
You know, it's always the focus because.
Speaker 1 (13:43):
Farmers usually screw it up and the government has not
helped anybody with these big death taxes.
Speaker 2 (13:48):
So how does this are these pieces fit together, Kevin.
Speaker 4 (13:51):
Well, succession planning is part of your overall you know,
goal setting for finances. We talked about short term strategies
for year in planning for taxes, but all that kind
of folds into the five and ten year plan for
where you're headed. And you know, succession planning takes into
(14:11):
consideration what is the value of my business currently and
what do I need it to be in order for
it to be either bought or attractive to one of
my children to buy into. What kind of position do
we need to be in for selling our farm if
we're going to sell it, or you know, bringing in
(14:32):
a partner, bringing in a successor of sorts, and you know,
there's a lot of considerations that go into that in
each year, whether it determines you know, further investment in
the operation, if it involves you know, stacking in enterprise,
(14:53):
going vertical, going horizontal, buying the farm next door when
it comes available. There's a lot of decisions that come
up up and you really have to define those succession
plans and goals at an early early stage to be
able to make those decisions.
Speaker 1 (15:09):
Well, how often have you seen in your practice the
situation is so bad farmers not having planned well that
when they pass away, the liabilities are so great.
Speaker 2 (15:21):
That the family has to sell the farm.
Speaker 4 (15:23):
Well, that's very industry specific and a lot of times
we have seen some of that in the dairy farms
and such, when conditions have been rough for milk prices.
Speaker 3 (15:41):
And land prices down.
Speaker 4 (15:43):
I think everybody knows about the eighties and where folks
were getting out and they had to get out. We've
not seen as much of that, you know, fire sales
situation since but it can happen. It's industry specific and
very farms recific. Usually if they don't have a succession plan,
(16:04):
it could very well result in that.
Speaker 1 (16:06):
Yes, yep, So that's something to keep in mind as well,
folks that are listening to this. It's something that you
hear and read about all the time, and that's because
it's important and it becomes a factor in holding onto
the farm frankly and making farm. You know, I went
through a bunch of stats for the audience a couple
of times in the most recent month of this broadcast.
(16:27):
How many people are on the farm, how many people
have left the farm. Going back to the nineteen twenties,
when we had a population of one hundred and five
million and the average acreage on farms one hundred and
forty eight acres, there were six million, four hundred and
fifty four thousand farms and twenty seven percent of the
of the American population were farmers. And you fast forward
(16:50):
to twenty twenty and we only we have a population
of three hundred plus million. The farm population is just
barely too much million. One point six percent of those
people on the labor force, work on the farm. The
number of farms has gone from six and a half
million to two just bailure over two million, and that
(17:12):
kind of stuff. When you look at that and understand
what's going on on the farm, it is really a
very good picture. And maybe he's a little philosophy involved
here on your part, because you see a lot of this. Kevin,
what's the future of farming in America?
Speaker 4 (17:28):
Well, if history says anything about the future, it's consolidation.
The GDP you know of agriculture has not gone down
one bit, it's increased significantly, while the number of farms
have gone down as you described. So when you look
at it from an economic standpoint, that means farms are
(17:49):
getting bigger and there's less of them. That's both, you know,
both a challenge and an.
Speaker 3 (17:57):
Opportunity, right for today's farmers.
Speaker 1 (18:00):
Well, you've presented us with lots of opportunity, lots of
good thought. I'm guessing that some of the people listening
to this program, even if they're not in your backyard,
I might to be in touch with you. The website
again for Kevin is Farm and Forest Services dot com,
Farminforest Services dot Com. Kevin Channel, who is from that
company here helping us with tax ideas, succession ideas, and
(18:24):
operating a farm from this side of the street pretty much.
Thanks very much, Kevin, Happy New Year. Appreciate your being here.
Speaker 3 (18:29):
Thanks Doug, I appreciate your time.
Speaker 1 (18:31):
Elizabeth Miller comes to us from the folks at Caldron.
This is the time of year when I advise people
to be defensive. The best defense is a good offense.
So I say to those of you who are eating
well Thanksgiving, Christmas, New Year's the best way to not
gain weight is to get on Caldron now and not
(18:52):
wait until you've already put the weight on.
Speaker 5 (18:55):
Well.
Speaker 6 (18:55):
You know, I know a lot of people would just
expect to gain weight over the holidays and then they
want to start Jane worry, I'm losing it. But like
you said, if you're taking Caldron, not only are you
going to be losing weight during the holidays, but you're
going to be having more energy to get things done.
And who doesn't need that during the holiday season.
Speaker 1 (19:11):
One of the best ways of getting the best out
of Caltron is as you check out to use the
Doug code DOUG on all orders. You'll be able to
have free shipping, and you also get the best deal
at that moment, no matter what it is you're taking
care of.
Speaker 2 (19:26):
Use Doug at toplaws dot com.
Speaker 6 (19:28):
This program was produced at Bobksound and Recording. Please visit
bobksound dot com.
Speaker 1 (19:34):
The American Family Farmer podcast sponsored in part by Caldron,
which is the safe way for you to lose weight
and keep it off.
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