Business Type

[darkmachine]

I guess this falls under "Sugarbush Management". I am interested to see what type of business organization types maple producers have experience with. My buddy and I are struggling to find a good fit. LLC, Partnership, Sole proprieter, etc. Here is the situation:

The sugar house will be on my property, most of the trees we are starting out with are on an ajacent property belonging to my grandfather, but we have a lease agreement for the trees. We put in an equal amount of work, and would like to be able to cover our expenses, and then divide any money over that between us, without having the shirts taxed off our backs.

Let me know what you think.

[WESTVIRGINIAMAPLER]

Money losing business, I guess that is why it falls under agriculture(farming). LOL!

[3rdgen.maple]

Cash business. No taxes:) But I think it would fall under agriculture.

[The Birdman]

Got this from the Goverment. Don't ask don't tell.

[Thompson's Tree Farm]

DM,
Your business is definitely agriculture and you will need to fill out a schedule F for your tax forms. I think the easiest way would be for you to each treat it as individual owners. Each of you would take half the income and half the expenses. Have a written agreement about who owns what so if one of you dies or something, others know who gets what (had a couple neighbors that had a great set up going until the older one died and some of his descendants got greedy). Sit down together on a regular basis and do your bookwork. Agree ahead of time what sort and dollar amount of expenses you each can incur without the input of the other. The retail part of my sugar operation is a partnership with my Dad. During the year, all income for retail sales goes into a joint checking account and agreed upon retail expenses (jugs, advertising, shipping fees,etc) come out. At the end of each calendar year we go over our sales and expenses and divide the account. We agree to each leave a bit so we have some seed money for expenses that occur before the account is replenished.

[red maples]

Good thread, I am sure there are other people with similar questions I have called 1 lawyer 2 times but he has not returned my calls. So I will ask on this thread. but I still need to meet with lawyer anyway.

I want to start 2 businesses. both under my name. one of course maple. the other Ice carving.

So I would like to have both under the same name. I know 1 is Agg. and the other sole proprietorship. My Accountant said(although he can't give out legal advice) to use a single Proprietor LLC. This way I only need 1 tax ID number, and I will get the best bang for the buck as far as the protection is concerned. because there is more liability in the ice carving part of it. And Our house and property is all in my name because because my wife is a doctor so if she ever gets sued they can't come after the house.

So what do you think???

[darkmachine]

keep the suggestions coming!! We are going to ask our CPA about the tax ramifications, and what will work best. Right now i have two other businesses, painting which is an LLC, and Computer repair, which is a sole proprietorship. We were considering and LLC for the Maple syrup business. Several people have mentioned agriculture, is that an option on the business license application in your states? It's been a while since i have seen the forms for WV.

We really just want to make syrup, and divide the money, and not have to worry about "The Man" breathing down our necks for taxes, and we want to make sure if something happens to one of us (either one decides they dont' want to continue, moves, or dies) that the other can continue without having a bunch of trouble.

[maplehound]

my tax preparer tells me I can run mine as a agriculture business as long as I show a profit every few years. Untill then I show a loss on my taxes from it. If they ever question this the IRS might make me consider it a hobby and not a business. In that case I don't report income or loss.

[Thompson's Tree Farm]

We are actually talking about 2 issues here. One is business structure, ie. Sole Proprietor, Partnership, LLC, LLP, or Corporation. The other relates to what tax form is necessary for the IRS. A schedule F as a farm enterprise or a schedule C as a business enterprise, or the particular forms used for LLC's etc.

[darkmachine]

In WV, Forestry (which includes maple syrup production) falls agriculture. So i get a tax exemption for the property. Not sure what else that affects. I also want to make sure the business structure we choose doesn't require us to pay workman's compensation, and associated fees for the few people that help with production.

It is definatly a seasonal work, and it seems like it would fall under the same umbrella that seasonal fruit harvesters?

[Kevin]

So, I'm reading all your posts but I don't know what we should do. We sell quite abit of syrup in jugs but my wife has been making maple candy, popcorn, lollipops, granola, cream, etc. We thought it would be nice to have a trade name but should we do LLC? Should we just stay "Raymond Sugar House" or actually register a name with the state?
HELP!

[WESTVIRGINIAMAPLER]

Dark Machine,

I have a business license from the state of WV and it is under agriculture. This is a big advantage as everything you buy is tax free. I have a sales tax free account at Lowes, so everytime I buy something, I advoid sales tax. I bought a new Kubota with a Loader a few years ago and it saved me nearly $ 750 in sales tax.

I only buy things tax free that are for making syrup or the sugarhouse, I don't take advantage of the system and buy things for home or other stuff tax free.

Also, the business license from the state of WV is free.

[OGDENS SUGAR BUSH]

kevin
talk to your tax accountant. he will know whats in your best interest.

RICH

[michelle32]

My wife works for a lawfirm an her comment was to talk to your accountant about llc 's and corporations. Then talk to your lawyer about your liabilty's. Then talk to your insurance company on how to insure this business. It is best to keep it seperate from your home and family belongings. Each and every state has it's on laws on this stuff.
Keith

[red maples]

my accountant said to avoid a corp if possible beacuse as I start out I will be loosing money for a few years until I get things going. Corps are expesnsive. and an LLC will offer you more liabilities. Maichelle32 is very right!!!

[markcasper]

In regards to maplehound telling of having a profit every few years to avoid being a "hobby". I have never heard this, on the contrary, you may never show a profit if you are always adding to your operation, and or get stuck with bad crops several years in a row. I do agree with covering the costs, even if your losing, that would be ok as long as other non-business income was able to cover the losses. Tons of businesses come and go on these grounds alone. No profit= out of business. Profit= in business for a bit longer.

[Thompson's Tree Farm]

Problem with a Corp. is you may be taxed on corporate profits and then taxed on any profits the corp. pays to you as an individual in the form of dividends. There are advantages however. For instance if you are self employed and buy your own health insurance, only 25% is a tax deduction but if you are a corp. and provide health insurance as a fringe benefit to your employees (yourself and partner) the entire cost of the insurance is a write off.

[HHM-07]

looks like your operation would be considered a hobby operation, if that is true you can call it whatever you like. you will never have to worry about paying taxes, last i knew you had to make a profit to be taxed, worry about how you can break even, thats what my better half would say


good luck Dick