Ag exemption for property taxes

[Silent Assassin]

man,
look @ all these people trying to get out of paying their fair share of taxes...


whats next, food stamps ?


(slow morning, )

We pay our fair share of taxes! If politicians can find loopholes, why can't we do the same? We still pay chunk of our money to taxes but I want to also reduce some of that towards to our ranch.

[Silent Assassin]

I will post the link to a great article that explains the difference between ag exemptions ( 1-D exemptions) and open space exemptions (1-D-1 exemptions)

The law is pretty clear on what you have to do to be a true "ag exempt".
According to the statutes, the landowner and the land must meet four
requirements as of January 1 of each
year.
• The land must have been devoted
exclusively to or developed continuously for agriculture during
the past three years.
• The owner’s primary occupation
and source of income are agriculture.
• The owner intends to use the
land for agriculture and as an
occupation or business for profit
during the coming year.
• The owner files an application by
sworn statement with the chief
appraiser before May 1 of each
year with all the documentation
required to determine the validity
of the claim. For good cause, the
chief appraiser may extend the
filing deadline 60 days.
After reviewing the application and
all the relevant information, the chief
appraiser must:
• approve the application and allow
the appraisal as agricultural use,
• disapprove the application and
request additional information or
• deny the application.

I suspect that there are very few posters in this thread that meet those legal qualifications.

On the other hand, the open space exemption qualifies the land only and not the owner. This is what most erroneously call an "ag exemption"
Open-Space Appraisal
(Section 1-d-1)
The other appraisal method, better
known as Open-Space or Section 1-d-1
land, requires the land, not the landowner, to qualify. The owner’s occupation, business and sources of income
are irrelevant.
According to the statutes, there are
three primary requirements for receiving the exemption.
• The land must be currently devoted principally to agricultural
use to the degree of intensity
generally accepted in the area.
• The land has been devoted
principally to agricultural use or
production of timber or forest
products for five of the preceding
seven years.
• The owner files a prescribed form
provided by the appraisal office
with the chief appraiser before
May 1 with all the necessary information to determine the validity of the claim. For good cause,
the chief appraiser may extend
the filing deadline 60 days.

Here is a link to the full article.

http://recenter.tamu.edu/pdf/1361.pdf

As an example on my place, the appraisal office came out and looked at the place. They carved out an acre around the house and appraised that at full (but still low) residential value. Then they took the rest of the place and valued it like I leased it out for grazing (agricultural
use to the degree of intensity generally accepted in the area.) so the value on the remaining property was only a few dollars an acre.

These guidelines should be standardized from county to county by state statute.

Posters? You mean posers? Who you calling posers? Just curious?

I communicated with my local CAD and asked tons of ?'s and have been informed what I needed to do and talked with CPA in Lockhart that does this stuff all the time for farmers and ranchers in Caldwell Co. We sat down and went over lots of things together about federal guideline. We are eligible. We are being active on our ranch, getting things ready to have fence put in and all to put livestocks on it so we can produce and make a record of it on yearly basis. I am going to be full time rancher when everything is all set on our property. I know I'm no posers. I have committed to do this on good faith and doing my part by learning things how to do this.

Even millionaires look for tax breaks. If federal law says what we can deduct from our tax then why y'all getting your pants in wad about it? Federal tax system wrote the tax codes, not us. Posers are for fake *** people who try to milk the system, that's not us! I put blood and sweat on this land to make a living since I can't find work anywhere so I'm gonna work on our land. Simple as that.

[cosmiccowboy]

Posters? You means posers? Who you calling posers? Just curious?

I communicated with my local CAD and asked tons of ?'s and have been informed what I needed to do and talked with CPA in Lockhart that does this stuff all the time for farmers and ranchers in Caldwell Co. We sat down and went over lots of things together about federal guideline. We are eligible. We are being active on our ranch, getting things ready to have fence put in and all to put livestocks on it so we can produce and make a record of it on yearly basis. I am going to be full time rancher when everything is all set on our property. I know I'm no posers. I have committed to do this on good faith and doing my part by learning things how to do this.

Even millionaires look for tax breaks. If federal law says what we can deduct from our tax then why y'all getting your pants in wad about it? Federal tax system wrote the tax codes, not us. Posers are for fake *** people who try to milk the system, that's not us! I put blood and sweat on this land to make a living since I can't find work anywhere so I'm gonna work on our land. Simple as that.

Cool your jets cowboy. Poster as in you just posted in this thread. I'm not calling anyone a poser.

And all I did was post the state statutes defining ag use.

The state laws refer to property taxes and sales taxes. You can get reduced real estate appraisal as a 1-D-1 (open space) exemption, but you can't legally deduct sales tax unless you qualify as 1-D (ag exempt as defined by state law)

You are confusing state and federal as well. There are federal tax laws for running a second business that it appears you and CPA are referring to. I assume you are currently deducting ranch losses from your ordinary income earned elsewhere. That is perfectly legal and those loss deductions will be recovered by the IRS when you eventually turn a profit or sell the property.

[GR5]

I'm not gonna get into the argument over all the qulifications. About 1/2 of our property is livestock and the rest timber. Livestock is a little better. each different survey is taxed seperately and you will benifit greatly if you can get the apprisal office to combine them. I bought a 42 acre tract and had to wait 6 years to get into ag. Yearly taxes were $1600, once into ag went to $52. Had another 10.5 acre tract that I had to wait on, was over $500 and went to $15.50

[cosmiccowboy]

Even millionaires look for tax breaks. If federal law says what we can deduct from our tax then why y'all getting your pants in wad about it? Federal tax system wrote the tax codes, not us. Posers are for fake *** people who try to milk the system, that's not us! I put blood and sweat on this land to make a living since I can't find work anywhere so I'm gonna work on our land. Simple as that.

I see that you edited and added the last paragraph. In that case you qualify for 1-D exemption since agriculture will be your primary occupation.

Good luck.

[Silent Assassin]

Cool your jets cowboy. Poster as in you just posted in this thread. I'm not calling anyone a poser.

And all I did was post the state statutes defining ag use.

The state laws refer to property taxes and sales taxes. You can get reduced real estate appraisal as a 1-D-1 (open space) exemption, but you can't legally deduct sales tax unless you qualify as 1-D (ag exempt as defined by state law)

You are confusing state and federal as well. There are federal tax laws for running a second business that it appears you and CPA are referring to. I assume you are currently deducting ranch losses from your ordinary income earned elsewhere. That is perfectly legal and those loss deductions will be recovered by the IRS when you eventually turn a profit or sell the property.

I apologize for the misunderstanding. I had thought you meant posers as if you were implying something.

You and I have been stepping on each other toes before regarding to this issue and I had thought that you may have directed this to me so I apologize.

Yes. I have been trying to say that I am doing this as a profit and as a business. That's why I got a DBA and registered with SOS.

[cosmiccowboy]

I apologize for the misunderstanding. I had thought you meant posers as if you were implying something.

You and I have been stepping on each other toes before regarding to this issue and I had thought that you may have directed this to me so I apologize.

Yes. I have been trying to say that I am doing this as a profit and as a business. That's why I got a DBA and registered with SOS.

Sorry, I didn't realize I was stepping on your toes. I was just trying to answer the OP's question by posting the states guidelines.

[TxAg]

This thread has been very entertaining. Some posters crack me up