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Understanding Section 1031 Exchanges

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By Dal Houston

Farmers, ranchers, and cattlemen in larger numbers are taking advantage of like-kind, or Section 1031 Exchanges. Section 1031 of the Internal Revenue Code allows property owners to defer capital gains on the sale of property when the sales proceeds are properly reinvested in like-kind property.

Although Section 1031 has been around since the 1920s, amendments in the 1980s, and regulations promulgated by the I.R.S. have led to a dramatic increase in their usage. It is important to understand that these transactions are not loopholes but are specifically provided in the statutes and regulations. While many landowners are taking advantage of Section 1031, there are still many misunderstandings and much confusion regarding their use.

Basic Example of Taxable Gain

When appreciated property is sold, the difference between the property’s purchase price and sales price is a capital gain, and therefore subject to capital gain taxes. For example, if a landowner purchased property in 1970 for $100,000, that now has a value of $1,000,000.
The difference of $900,000 is a capital gain and thus subject to capital gain taxes. Please note this does not take into account any deprecation or improvements to the property.

To read more, pick up a copy of the October issue of NTFR magazine. To subscribe by mail, call 940-872-5922.

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Outdoor

Grazing North Texas: Wild Onion

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By Tony Dean, [email protected]

There are 14 species and several varieties of wild onion in Texas. These herbs are biennial or perennial and all are strongly scented with an onion or garlic/onion scent. During early spring in Texas, underground bulbs (small onions) give rise to two long narrow leaves and a stalk that grows between the leaves which supports a cluster of small flowers. These flowers can be white, yellow, pink, red, or purple.

Wild onions belong to the genus Allium which includes not only onions, but also shallots, scallions, leeks, chives, and garlic, all of which are edible. Wild onions are common over much of the United States and grow in every region of Texas. They are adapted to almost every soil type.

Both wild onions and cultivated onions contain trace amounts of a toxic agent called N-propyl disulfide, which destroys red blood cells. The amount of toxins varies widely in plants, varieties and species, and a large amount would need to be consumed for poisoning to occur, so poisoning issues in people or livestock are very rare.

To read more, pick up a copy of the June issue of NTFR magazine. To subscribe by mail, call 940-872-5922.

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Outdoor

Parting Shot: Dancing with Rain…

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By Jelly Cocanougher

With rainfall expressing all over the region, it looks in resemblance to landscapes that drape over the English countryside when viewed with a squint. There are lush and greened up landscapes with newly adorned blossoms peacocking themselves. Meanwhile, cowboys chase the horizon, in pursuit of cattle they seek to gather. A poetic infrastructure claims the enriched land, solace between nature, and the symbiotic relationship of horse and man.

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Outdoor

Grazing North Texas: Bud Break

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By Tony Dean, [email protected]

Many of us who live and work in the country take note of when mesquites leaf out in the spring. For most people, this is just a casual observation of life around us and a promise that warm weather is around the corner.

If you are interested in killing mesquite with an herbicide, “bud break” on mesquites is a significant event and signals the beginning of your planning for a successful control.
Mesquites go through a fairly predictable life cycle every year. This, of course, changes somewhat with location, weather patterns, soils, and other factors, but the overall process is very similar wherever you find mesquite.

To read more, pick up a copy of the May issue of NTFR magazine. To subscribe by mail, call 940-872-5922.

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