I recently attended a three day Range Beef Cow Symposium in Cheyenne, Wyoming. It was loaded with up-to-the minute research findings and data pertinent to the cattle industry. While my husband soaked in all of the practical applications to our high mountain cattle herd, I found the legislative and advocacy presentations applicable to both my ranching profession and my ranch brokerage profession. Being a new member of the National RLI legislative committee, I’ll share some of my key takeaways that may help farm and ranch brokers when they sit across the table from their clients.
*The estate planning landscape has changed-in a good way-at least for the next 8 years. The estate tax exemption has doubled to roughly $11M for an individual and $22M for a couple. This new exemption certainly affects succession planning and how we as ranch brokers help farmers and ranchers achieve their acquisition, disposition and transition goals.
*1031-exchange provisions survived the proposed overall chopping block but didn’t come away unchanged. Most notable to us is that real estate (which generally appreciates) and buildings are still allowed while breeding livestock and some equipment (which generally don’t appreciate) are no longer allowed.
*The new tax law increases the deduction for breeding stock, race horses, and equipment to 100% for property placed in service after September 2017. The ability to expense breeding cattle could be significant for buyers who purchase a ranch that is being sold with livestock.
*WOTUS (Waters of the US) is a topic I’ve followed for years; its implementation would have had far reaching effects and could have hugely affected me and my ranching neighbors. On January 22, the US Supreme Court unanimously decided to give federal district courts jurisdiction over WOTUS. This important decision shifts the focus away from federal regulation and is a tremendous victory for water users who have challenged the rule in court. Also, on January 31 the EPA and the Army Corps of Engineers officially delayed application of the 2015 WOTUS ruling for two years. This will give the agencies time to provide long-term regulatory certainty about which waters are subject to federal regulation or to possibly repeal it altogether.
*98% of consumers have no connection with production agriculture. They don’t know what we do on a daily basis and many consumers are exposed to one-sided information. Although many ranch brokers don’t have to get up at 2 a.m. for the middle-of-the-night calving check, they are directly involved in agriculture because they’re the ones helping farmers and ranchers trade in and out of the land. Anytime the benefits of agriculture can be shared by those involved in the industry, we tip the scales back toward the realities of feeding large populations with limited resources and maintaining the scenic, open landscapes that characterize rural America.
The agriculture industry like the real estate industry is constantly changing. New rules affect both industries and we can be better brokers when we are aware of the changes affecting the lives and businesses of many of our clients.
Christy Belton owns Ranch & Resort Realty in Steamboat Springs, Colorado. She is also a rancher and with her husband operates a commercial cattle and hay business in the Elk River Valley and on the adjoining Routt National Forest.