You’ve searched high and low for the perfect Florida ranch for sale and you’re ready to make the investment. As Florida land brokers, we know it can be an overwhelming process, so we’ve compiled a couple of items to take into consideration before making the final commitment.
Local & State
Investing in ranches for sale in Florida can come with a number of attractive benefits including tax incentives and exemptions. There are a variety of tax breaks that are available to owners of agricultural land, and as a farmland investor, it is important to know which tax breaks are applicable to your operations. Each state varies in the incentives it offers, so check with your local tax assessor for more details for the State of Florida. Conservation and capital expenses are an example of tax deductions that are related to privately owned land that is used for ranching and the costs associated with grading land, restoring soil fertility, and construction of dams and ditches. It does not, however, include land filling or drainage of wetlands.
Income tax is very important when it comes to your investment. You will need to prove to the IRS that your investment is indeed a business to receive income tax breaks. To prove this, you will need to the show the IRS that your investment has made a profit in three out of five years.* There are several important federal tax breaks that investors should be aware of. Farm expenses can be deductible, and can include anything from farm equipment, farmhands, livestock feed, and veterinarian bills. Livestock that is purchased for resale can also be deducted, fuel and road use can be deducted, and net operating losses can be carried over to other years and be deducted.
2. Understand Your Zoning Laws
If you plan to utilize your ranch for sale in Florida for agricultural purposes, you will need to check with your local zoning department to make sure what you want to grow or raise on your property is allowed, especially if you plan on selling your commodity. If you want livestock on your property, you will need to check with the local health department. Different zoning laws will determine what type of livestock is allowed in your area, and how many you are allowed to have. In addition, enhancements, such as permanent structures or wells, must be approved by the local governing agency.
*This information is for educational purposes only. It is not intended to take the place of qualified advice from a tax professional or IRS representative. You should always remember that deductions and tax write off rules and regulations for farmland owners are constantly changing. If you have any IRS questions or want to stay up to date with deduction rules, please contact the IRS for assistance.