Doug Phillips

The real estate world has changed dramatically in 15 years. Just over a decade ago, the real estate market knew nothing of post-COVID inflation, massive job market changes and the high-speed information that we know today.

But 15 years ago, one of San Joaquin Valley’s top ag real estate companies specializing in farm and ranch properties in California and the Western U.S., Schuil Ag Real Estate, formerly Schuil & Associates, recruited me to their team. With previous experience as field manager on my family’s farm and owner of “Farmer’s Fruit Stand,” a wholesaler of gifts of fresh fruit shipped direct from Phillips Farms, I found myself at the helm of a growing ag real estate group with a reputation as “one of the most reputable ag real estate leaders,” implementing innovation and trust in a rapidly changing real estate market in the agriculture industry.

Today, our industry is fortunate to say that agricultural real estate has less volatile swings than residential real estate. Land is a great hedge against inflation, with vigorous returns. However, there are certainly ups and downs in different agricultural sectors in any given year, so finding a way to help clients navigate the good times and the bad has been one of our strengths.

When it comes to tax season and agriculture real estate, it’s vital to maximize all opportunities, and surround yourself with experts. As this year’s Tax Day approaches on April 18, here are a few tips to consider:

Tips for buyers and sellers in today’s market

1. Be in constant communication with your “team” — your accountant, attorney, real estate professional and financial advisor.
2.  
3. Think “big picture.” Decisions today are generational decisions, so it’s important to think long-term.
4.  
5. When it comes to 1031 exchanges, it’s vital to understand your existing situation and the capital gains tax consequences. If you sell a property that has increased in value over time and/or been depreciated, you will need to pay capital gains taxes on the sale. To avoid this, you may do a 1031 exchange, allowing you to defer taxes by purchasing another investment property of equal or greater value than what you sold. You have 45 calendar days to identify exchange properties, and 180 calendar days to close escrow.
6.  
7. Always have a back-up plan. In real estate, things never go according to plan, and it requires a lot of “bob and weave.” You can lessen the blow by having a “plan b” that gives cushion and still helps achieve your real estate goals.

 

Farmland buying and selling can be a monumental process, and Schuil Ag Real Estate has decades of experience in helping landowners transition to commercial investments, and an extensive network of advisors to help along the way. Being a part of a family, locally owned business has helped me to be responsive in making quick adjustments to changes in the agricultural economy. Because our team meets weekly to discuss threats and opportunities impacting our clients — and ultimately our company — we can pivot very quickly through just about anything.

---

Doug Phillips is president and principal of Schuil Ag Real Estate (formerly Schuil & Associates). Schuil Ag Real Estate will be launching a series of educational opportunities this summer, including sharing free tax resources and answering tough tax questions during a live online Q&A session with partners in the finance industry. Visit schuil.com for more information.