Ohio State University Extension Bulletin

Transferring Your Farm Business to the Next Generation

Bulletin 862

Authors

Jim Polson - District Specialist, Farm Management
Robert Fleming - District Specialist, Farm Management
Bernie Erven - Extension Specialist, Human Resource Management
Warren Lee - Extension Specialist, Agricultural Finance

A Note From the Authors
About the Authors

Part I. Guidelines for Measuring Business Feasibility
Guidelines for Measuring Financial Viability
Farm Financial Ratios

Part II. Retirement and Financial Issues
Life Cycle of a Farm Business
Life Expectancies
Effects of Inflation on Retirement Income
Some Financial Rules of Thumb
Net Worth Under $400,000
Detaching Yourself From Financial Responsibility

Part III. People Issues in Transferring the Farm Business
Some Reasons Transfers Fail
Human Relations Guidelines in Business Transfers
Transfer Acceptance and Affirmation to Children

Part IV. Planning an Orderly Transfer
Intangible Transfers
In What Order Do You Transfer Tangible Property?

Part V. Tax Considerations
Selling Farm Real Estate to Children
Giving Away Farm Assets
Sale of the Personal Residence
Sale of Machinery and Equipment
Selling Livestock to Children
Selling Raised Grain, Hay, and Inventories
Required Minimum Interest Rates
Leasing Your Farm Assets to Your Children
Consider a Farm Purchase Option for Family Members

References

All educational programs conducted by Ohio State University Extension are available to clientele on a nondiscriminatory basis without regard to race, color, creed, religion, sexual orientation, national origin, gender, age, disability or Vietnam-era veteran status.

Keith L. Smith, Associate Vice President for Ag. Adm. and Director, OSU Extension.

TDD No. 800-589-8292 (Ohio only) or 614-292-1868

Transferring Your Farm Business to the Next Generation

Bulletin 862

Authors

Contents