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What is the South Dakota Department of Agriculture's Mediation & Counseling Program?
The South Dakota Department of Agriculture provides help to farmers and ranchers through the Ag Finance Counseling Program. Finance counseling can help producers understand their financial situation and make informed decisions.
What is a 1031 Exchange in South Dakota?
A 1031 Exchange (also called a like-kind exchange) is a swap of one business or investment asset for another.
A 1031 Exchange allows you to sell an appreciated asset (generally rental or investment real estate) and defer the payment of your capital gain taxes by acquiring one or more replacement properties.
What are my rights if I rent farmland in South Dakota but do not have a written lease?
South Dakota law allows for oral leases for any size farm. The leases run from year to year.
The law includes specific provisions regarding oral leases for rental of farms that are 40 acres or more. By law, the oral agreement is a year to year lease. It automatically renews from year to year under the same terms.
The landlord must give notice on or before September 1 in order to terminate the lease or it will be automatically renewed. If the notice is timely, the tenancy terminates by law on March 1. However, if the tenant defaults (by failing to pay the agreed upon share of the crops, for example), then the landlord may give written notice later than September 1 and still terminate the lease.
South Dakota Agricultural Law - What is a "General Partnership"?
Today, farms are more complex than ever, and as they continue to grow, many farmers are considering their options for organizing the farm into a structure that best fits their farm's needs. Choosing to organize a business using a different type of entity can be a difficult decision, as each type of entity has its advantages and disadvantages while individual farmers also have a wide variety of goals and objectives that are most important to them and their particular operation.
A "General Partnership" is created when two or more individuals conduct and hold themselves our as a business. Once a partnership is established, partners to the business share equally in the profits, as well as losses and liabilities. Generally, each partner is liable for the other partner's business decisions and liabilities related to the business. For example, if one partner incurs a large debt within the scope of the business, the other partners could also be responsible. While a "General Partnership" can be useful in bringing farmers with mutual interests together, it also presents a potential financial and liability risk.
In South Dakota, can I use a 1031 Exchange for personal property?
No. A 1031 Exchange is for investment and business property - not personal.
In other words, you can’t exchange your primary residence for another.
In South Dakota, how many times can I do a 1031 Exchange?
There's no limit on how many times you can do a 1031 Exchange. You can roll over the gain from one piece of investment property to another, then another and another.
South Dakota Agricultural Law - Who Manages the Trust?
Trust assets are managed by a trustee. The trustee can be the person who set up the trust, a corporate entity (bank or trust company), another family member, friend, or a combination of these.
South Dakota Agricultural Law - What is a trust?
The trust is often a useful and flexible tool for a South Dakota farmer's estate planning. A trust is an artificial entity created by a document or instrument.
A trust requires four basic elements - trustee, trust property, trust document, and known beneficiaries. The trust document contains the trust's "rule book" including the powers of the trustee, the beneficiaries to share in the income and principal from the trust, and instructions for distributing of the trust property.
What is the South Dakota "Century Farms" Program?
The farm has long been the cornerstone of South Dakota history. None more perhaps than the farms that can be honored as South Dakota Century Farms. The families that own and work these farms have done so for one hundred years or longer.
If your family has retained ownership of a farm or ranch for 100 years or more in South Dakota, and if the farm consists of a minimum of 80 acres of the original farmland, you may be interested in having your farm designated as a Century Farm.
What is the South Dakota "Farm Link" Program?
According to the U.S. Department of Agriculture - National Agricultural Statistics Service (USDA/NASS), the majority of farm operators are between age 45 and 64. This aging trend in the agricultural industry is a growing concern.
In addition, the number of farms in South Dakota has steadily declined from 1982 to 2011. During this same time, the average farm size has increased. The concentration of large farms is an increasing challenge for beginning producers to purchase agricultural land.
The South Dakota Department of Agriculture’s (SDDA) Farm Link Program can assist the beginning farmer/rancher in their endeavor to find access to agricultural production land.
Farm Link began in 1993 and is a free service administered by the South Dakota Department of Agriculture in cooperation with the SDSU Ag Extension Services.
Farm Link creates a directory of beginning farmers and ranchers as well as a directory of current or retiring farmers and ranchers for the purpose of facilitating a skills mentoring and land transition relationship.
By working with established landowners, new and beginning farmer/ranchers can gain access to the land, resources, knowledge, skills, and support they need to make a successful start.
SDDA also offers financing programs to assist farmers, ranchers, and value added agriculture production or processing ventures to purchase land, machinery, equipment, or livestock. The Beginning Farmer bond program allows eligible beginning farm/ranchers to obtain lower interest rate loans for qualified purposes by obtaining loan funds from the proceeds of a tax exempt bond issued by the South Dakota Value Added Finance Authority (VAFA). The bond program also allows a land owner to contract sale land, improvements, breeding livestock, or other depreciable agricultural property to an eligible beginning farm/rancher thereby receiving a federal tax exemption on earned interest. Information and eligibility criteria for the VAFA and SDDA financing programs are available at http://sdda.sd.gov/farming-ranching-agribusiness/financial-assistance-programs/ or contact the Division of Agricultural Development at (605)773-5436.
If you are a Beginning Farmer or Rancher:
Farm Link matches your interests with the farms and ranches in the Department of Agriculture's database. There is no maximum age definition to be a "beginning" farmer/rancher.
Through the Farm Link Program, the beginning farmer/rancher can benefit by:
- Gaining access to agricultural production land,
- Find help with financing, and
- Learning success tips from experienced landowners.
If you are a Landowner:
Farm Link can help match the characteristics of your farm or ranch with the interests of a beginning farmer or rancher in the Department of Agriculture's database.
Through the Farm Link Program, the landowner can benefit by:
- Ensuring the continuity of the farm/ranch family operation & legacy,
- Bringing fresh energy & strong hands to work on the farm,
- Promoting good land stewardship, and
- Ease the transition into retirement.