|C. Robert Rice on Making Your Farm a Business|
I am usually a good notetaker, but I am offering a disclaimer to the notes that follow: they are as good as I could understand them. If there are errors, they are mine, not Rice's. Please do feel free to contact him, as undoubtedly I will be doing in the near future.
200 Spring Ridge Drive
Wyomissing, PA 19610
T 610-374-2595 F 610-374-2597
|A thorough excellent presentation!|
Where expenses are larger than income, Act 183 covers hobby losses. There are 7 steps to analyze for hobby losses. If the farm is a hobby, losses are not covered against other income as an offset in Pennsylvania. If your farm is a business, then the IRS will tax it.
LLC: single member LLC, meaning you go to the state to apply, need an attorney and an operating agreement. If you operate as a business, look like and run as a business, you can better offset losses. LLC is a middle ground between sole proprietor and LLC. Then you operate as an LLC. A corporation is taxed as such; you can be the sole owner of the farm business or you could be GM. Either way, you would be a PA corporation.
Bottom line: you need to generate sales. C Corp has a viable business; S Corp is a beginning way to go if you are generating losses.
Accounting is vital if you are going to run a business. It has its own bank account, a manual ledger system and/or a computer ledger (Quickbooks, Peachtree, Quicken). Do not write checks out of your personal checkbook; checks must come from the business bank account. A separate credit card for the business is not required, but you must write a separate check for the business with a business checking account. If you are an LLC or a Corporation, you must have a separate account, credit card.
|You need a short and long-range plan|
You need to think about what your business goal is—what do you want to see as your endgame 5 years, 10 years down the road? Your business is a work in progress; you need to make adjustments as you go. As you grow as a business, you need to make logical projections. You should review your projections and goals annually, and ask yourself where you want to be based on where you have been.
It takes time to develop a recognizable business name.
This presentation just might have been one of the most practical and timely one that I have had the pleasure of viewing.
|Tech savvy and wonderful!|