As to the low-houred small ones, as said below, many buy them and then find that they really have no need for them, and they are re-sold. Even if you do use it in a part-time farming situation they won't accumulate many hours, because there just isn't that much to do. We have horses, and have to spread manure- we'd always done it with old tractors, which was fine for me, but we needed something dependable that Mrs. (WA) could start and run (without having to hold your mouth right). Bought a new small JD compact utility in 2005, and it has about 120 hours on it now. Use it to bush-hog a few times in summer and a few other projects, then 10 minutes every weekend to spread manure over the winter, when they're not on pasture. We're 64 now, we've got maybe 5 more years of this fun, then it'll get sold with about 200 hours on the clock.
As to the big rigs, I think back to the late 70's, when I was a loan officer for PCA and dairy and crops were good. In retrospect (after the big shake-out in the early 80's), the CPA's and tax advisers probably put more people out of business than any other single factor. There was an Investment Tax Credit of 7% of the cost of the item off your income tax, as well as depreciation, for buying new stuff- and every farmer that had a good year was advised to go buy new equipment to minimize his taxable income. The bean counters were largely blind to the cyclical nature of farming- their mission is to minimize this years taxable income, and the devil take the hindmost. Of course, they couldn't make the payments when the bottom dropped out a couple years later, so we carried over part of the operating line (and they refinanced real estate) until they had used up all their equity, then came the farm sale.
It probably makes pretty good sense to lease the big items now, especially if reliability is really a factor after 5000 hours. As someone mentioned, its all deductible, you just have a "permanent" machinery cost (with little repair needed), you have machinery that gets the job done, and you can adjust the size of machinery every 3 years to fit your expanding (or contracting) operation. One big dairy farmer here, who put up lots of grass and corn silage, actually rented for a few weeks in the spring and a few weeks in the fall for the corn silage, and used an owned (but smaller) tractor for the grass through the summer. He had a deal with local Ford dealer- they'd have a used 150 HP from the lot, prepped and ready, for when he needed it. If it broke down, depending of the severity, they'd be there within 30 minutes to fix it, or with another tractor to swap until they could get the first one fixed. Worked great for him.
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Today's Featured Article - A Lifetime of Farm Machinery - by Joe Michaels. I am a mechanical engineer by profession, specializing in powerplant work. I worked as a machinist and engine erector, with time spent overseas. I have always had a love for machinery, and an appreciation for farming and farm machinery. I was born and raised in Brooklyn, New York. Not a place one would associate with farms or farm machinery. I credit my parents for instilling a lot of good values, a respect for learning, a knowledge of various skills and a little knowledge of farming in me, amo
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