Ted (01:23.67)
Welcome to today's program. Our special guest today is Howard Halderman from the Halderman Companies in Wabash, Indiana. Howard and I have become acquaintances over the last several years because of his extensive experience in the farm land and farm management arena. Welcome to the program today, Howard.
Howard Halderman (01:47.31)
Great to be here, Ted, and thank you for the opportunity.
Ted (01:50.006)
I'm really excited to talk about some of our farm topics. As you know, we do an awful lot of farm estate planning. The information you have always shared with us and with our farm clients has been very helpful so that they can see the trends. Tell us a little bit about Halderman Companies and how long you guys have been around, where you're located, and what services you provide.
Howard Halderman (02:16.984)
Sure. So the Halderman companies are based, as you said, in Wabash, Indiana, which is North Central Indiana. We have area representatives in Ohio, Michigan, and Indiana. And we provide farm management, farm real estate, brokerage, and farm appraisal services throughout the three to four state area in the Eastern Corn Belt. So that would be Indiana, Illinois, Michigan, and of course, Ohio. And so we've got representatives in all of those. We provide, as I said,
farm management, real estate sales and acquisitions and do appraisals in all four of those states. And we've been doing this since 1930. So my grandfather started the business 94 years ago. In fact, we now have the fourth generation of Halderman in the business today with my son Joe joining us a couple of years back. So we really represent landowners. if so, if you own a farm, we can help you. And it may be in a variety of different ways, but that's our main service area.
Ted (03:17.87)
There's a number of topics we want to cover today. Let's start with what you're seeing in terms of farm income.
Howard Halderman (03:26.094)
Farm incomes are challenged this year, Ted. The USDA is projecting a 16 to 20 % decline in farm incomes from 2023. This is primarily due to lower commodity prices. So corn and soybean prices have fallen pretty dramatically over the last 12 months. Last fall, we were looking at $5.50, $5 corn, and this fall, cash price out of the field, you're at three something.
So a big decline in cash income largely due to these declining commodity prices. Now yields vary and they vary across the region that you're covering. But generally speaking, USDA has projected that crop yields, corn and soybean yields specifically, should be fairly good. In fact, record when you look at the USDA projections, especially for corn. I think USDA has...
retracted a little bit or reduced a little bit the soybean yield because of the dryness that we've experienced in August and September across the Corn Belt. But generally speaking, yields are projected to be pretty good. Now, of course, that's one of the negatives on commodity prices, but probably not enough to offset the decline in corn and soybean prices. So therefore, incomes on the farm are declining from what they have been. Now, to put that in perspective.
2021, 2022, and 2023 exceptionally good farm income years. So while 24 is a decline, right now the projection is still right at or close to the 20 year average farm income level. So I don't wanna portray that it's doom and gloom with farm incomes. Certainly not as good as it has been the last three years, but still at
the average over the last 20.
Ted (05:24.768)
Interesting. Well, let's discuss land values. What are you seeing there? That seems to be always generate a lot of conversation amongst my clients. What are the trends?
Howard Halderman (05:37.23)
Great question. With falling commodity prices last winter and spring, there were a lot of folks that said, we expect land values to start to decline. We have been really since 2022 at the all time high of farmland values. And that's at the all time high, even if you adjust for inflation. So taking inflation into the equation, 2013 was the previous all time high.
and 2022 eclipse to that. Now, one of the things that we use at the Halderman companies is the dollar per productivity index, basically corn visual, of value. So soils in Indiana, Michigan and Ohio are rated for their ability to produce corn. And it's, you basically can index the soils, you can average the various soil types that exist on a certain farm. And you might come up with an average
corn productivity index of 150 bushels per acre. And then we basically take the sale price. So say 15,000, divide it by 150 bushels and you have a indicated $100 per productivity bushel, corn index bushel. So that's what we call dollars per WAPI, weighted average productivity index. I know that's long for a podcast, but
Basically what the listener needs to know is that between 2016 and mid 2021, across Ohio, Indiana and Michigan, we saw farmland trading in the $50 per corn bushel of productivity index rating. What that meant Ted is that back in those times, you could have taken your personal farms productivity index, call it 150, multiply it times $50.
And that might have been fairly close to what the market price for your farm was. So we saw in 2021, now farmland is a got a direct correlation to inflation. It's a one-to-one correlation. We saw inflation hit in 21. We saw our productivity dollars per productivity index jump from the mid fifties to over $80. It was a 40 % increase almost overnight in the second half of 2021.
Howard Halderman (08:00.174)
We peaked at $86 in 2022. These are actual sales results. It's not a survey. It's not an opinion. These are farms we actually sold 80 % prop land or more. So we peaked at $86. The last two years, 23 and 24 are in the 82 to $83 range. So all the sales that we've done to date in 2024, we're averaging around $83 per corn bushel of productivity index.
So again, close to the all time high, maybe slightly off. The surveys done in Illinois and Iowa here in the last couple of months from the professionals, farmland professionals in those two states would indicate they think farmland could come off maybe 5 % this year. So a 5 % retraction would be $4. So maybe we've seen some of that Ted is a slight decline. I think most of the decline is in
farms that are average to below average in productivity. The premium farms, and we all know where those are located. know, you think Mercer County, for example, you think some of the better farms over, say over by Jamestown, those farms are gonna hold value in spite of a little bit of a weaker farm income climate. Whereas those below average farms, more rolling farms, lower productivity farms, they're probably the ones that decline in value first.
So that 5 % average decline is spread over all land classifications. So I don't expect to see a lot of records set this fall with any sales. But by the same token, wouldn't, as a buyer, I wouldn't go into a sale expecting to get a tremendous deal either. I think the market is probably stable to slightly down as we look to the farm sales that we normally see in October, November, December.
Ted (09:55.412)
Other than production, what are some of the other two or three factors that impact the land value?
Howard Halderman (10:04.312)
Great question. So farm incomes are the biggest impact and that's production times price. The second biggest factor is supply. You know, it's a supply and demand market. And we have been trading, I would argue, at a below normal supply of farms for sale for a number of years. And this goes all the way back really to the fall of 2012. And you might recall the fall of 2012 was the election year. Mr. Obama was
largely predicted to win his second term. And it was predicted to be a democratic Congress. So one of the interesting things we saw in that presidential election cycle, a lot of folks said, Hey, I won't sell and close in 2012 because I want to make sure I guarantee the capital gains tax rate that existed at the time. Now, the interesting thing is Congress never changed capital gains tax rates, even though Mr. Obama was elected and we had a democratic Congress.
So it never changed, but the fear factor really drove a lot of sales. But honestly, since that timeframe, we've not seen a real abundance of farms come on the market. And you would say, well, Howard, what's the normal average? And I think people would tell you that two, two and a half percent of farms sell every year. And we've been seeing a smaller percentage than that over the last 10 years. Now, one of the interesting things about supply,
is that historically, when I started my career 36 years ago, we would see a lot of sales Jan, Feb, March, just because that was, you know, first of the year, you got through harvest, and that's when a lot of farms traded. Now we see more of the sales in October, November, December. And I think that's more indicative of society today. Information transfer is a lot faster. know, harvest a lot of times is a little quicker.
because of bigger equipment and technology that we have today. So I just think people make the decision summertime, early fall, we're gonna make a change after the end of the year, we wanna sell the farm before the next crop goes in the ground. And we're gonna go ahead and do that in October, November, December. So that's been one supply shift is that there's more in the fall than there is in the first quarter. But when you average the whole year out, we're really just seeing that the supply remains fairly tight. That's bullish for farmland.
Howard Halderman (12:28.074)
and has been bullish for a number of years. Another factor is interest rates. So you've got incomes, you've got supply, and then you've got interest rates.
Ted (12:36.482)
What's happening or what are you seeing on the interest rate front? What's the latest?
Howard Halderman (12:42.286)
Well, know, Fed just reduced interest rates on the high, their high line number by 50 basis points. So what I'm seeing in the farmland space is that you're now seeing some longer term money in the high fives, 5%, 5.8, 5.9 % fixed for 10 years with a 30 year AM, Amerton Station.
Ted (13:04.174)
You know, that compares, I recently had a client sell his business. It was unrelated to the ag sector. And the buyer was quoted 8.5 % rate. What I hear you saying within the farm sector, we're still at, even though it's going up, we're still at the 5, 5 and 1 percent rate today.
Howard Halderman (13:31.438)
No, I would say high fives. So high fives and sixes is what you're going to find. you know, farmland is a long-term asset, much different than making a business loan, you know, just a different type of a loan in a lot of ways. But that was through a large insurance company. They have some rules and sizes that they will do. But I thought it bullish that interest rates, there was at least some available out there that started with a five in front of them.
Ted (13:33.336)
High fives, okay, all right.
Howard Halderman (14:00.878)
And I've argued that, and I see housing rates come out from one of our local banks here in Wabash every week, and housing rates are in that 6.1, 6.2 range right now. And I've suggested to some folks that you see those housing rates get down around six or into the fives. I think that will stimulate the housing market. I think folks that had a low interest rate mortgage and it was locked in long-term, they saw the interest rates really
shoot up, they basically said, well, I want to move. I want to move to a different neighborhood. I want a different house. I want smaller, bigger, whatever their needs were. But they weren't selling because they were locked into this low interest rate loan and they didn't want to get a new loan at a much higher interest rate. I think when you see it decline to that level, that'll be motivational in the housing market. Does that also have a similar impact on farmland? And I would argue that it has a slight impact.
I think it will be somewhat favorable just that interest rates and it's probably more the perception that they're trending down as much as it is the actual rate itself. I think farmers and land buyers will feel better that, okay, the Fed is now starting to reduce interest rates. They're projecting maybe a cut or two more this year. So interest rates are gonna continue to go down. I'm okay with making my farmland acquisition.
and knowing that probably I can get a variable rate that might move down. Or if I fix the money in and then we see another 100 basis points come off, I might refinance in a year. So I think that's favorable for farmland values. So farm income, supply, and then interest rates are really the three big drivers historically that we see.
Ted (15:50.05)
Very good. Well, let's do this. Let's talk about something that just in the last two years, I've had a lot of conversation. In fact, just this week, got some more inquiries about some of the alternatives that some of our farmers are being asked to consider, whether that be solar or whether that be wind, any of those kind of alternatives.
What are you seeing in terms of trends in that regard?
Howard Halderman (16:21.934)
So we have had wind really started to develop in the Midwest back in the early 2000s. First big wind farm in Indiana went up in 2000, 2001 timeframe. The wind turbines are fairly well known. There are a lot of communities that don't want them, but when they're in place, they will actually add 500 to $1,000 an acre on an 80 or 160 acres with one.
wind turbine on it. And that's purely just capitalizing the income generated from that turbine into the value of the real estate. A wind turbine takes half an acre out of production. So the wind market's fairly well known. There's still opportunities in wind, but I wouldn't suggest that that's really a big driving factor in the Eastern Corn Belt today. Solar really picked up three years ago.
We saw a lot of push. There was a big initiative from the federal government to a lot of grants and basically some opportunities for solar companies to grab onto some federal dollars, green energy dollars. And I think there was a big push we experienced all throughout Ohio, Indiana, Michigan for solar development.
What I've heard more recently, what I've seen is that that's slowed a little bit. think higher interest rates have certainly slowed that development down because they're very costly to build. But the other factor is there are a lot of communities that just don't want solar farms on farmland in their area. And so as a result, the solar developers have gotten a little more sensitive to the fact that, okay, there's some places, some counties we just don't even go to because we have no shot of getting a plan.
approved, so why spend the time and the money to develop it? So, but solar rates, they're paying $1,200 an acre, maybe $1,500 an acre, and in some cases more depending on the property's proximity to the substation and access point into the grid. You can even see some rates higher than that, but that $1,200 to $1,500 is kind of the range today.
Howard Halderman (18:37.806)
When you compare that to cropland rents of 300, 350, it could be attractive. And I think a landowner could look at that and say, you know, if I'm a farmer and I'm farming 5,000 acres and I own a thousand acres, if I put 200 in solar, does that help basically shore up my operation long-term because of the revenue that could come in from that? So I think with the farm economics changing a little bit in the last 12 months, that there's going to be some more farmers interested.
in solar. It'll just really depend on what's the state mandate. I've heard that Michigan and the Michigan governor have been much more solar friendly. And so as a result, we see a lot more solar development in Michigan than what we've seen in Indiana. So it does vary a little bit by state legislation. So those are really the big two.
Ted (19:31.72)
Are are those are both solar and wind are the capital costs borne by the company and not the farmer and is it from the farm standpoint is it simply rental income in most cases?
Howard Halderman (19:47.502)
Exactly. So that's great point. So the solar developer is going to take a contract, an option, lease option on your land. They're going to pay you $25, $50 per acre per year for that option period. Then they start to develop. If they get approvals, then they start to develop it. There's a development payment that usually is about half of the rental rate. And then once they're in production, once they're producing electricity going onto the grid, you get the full rental rate. None of the cost.
of the development, the permitting, the construction, none of that is borne by the landowner. The solar developer pays for all of that. So really in wind and solar, outside of the loss of acreage for use, the farmer really doesn't have any obligation. In fact, the real estate taxes go up incrementally because of the new development, the investment that's being made on those acres for the wind turbine or for the solar panels.
But the contracts all say that the developer, the solar or wind company, pays for the incremental increase in real estate taxes over what they are for just the base farm.
Ted (20:58.764)
One of the thoughts that one of my clients raised with me is what happens if the solar company fails and when I've got all these panels sitting on my farm, who's responsible for getting rid of it and what's it going to cost? Is that a realistic concern?
Howard Halderman (21:18.422)
It is. So if the solar company were to fail and all of sudden you've got a field full of panels and the lease agreement says at the end of the lease term, they're to remove it and put it back the way it was. In theory, that can be done. What I have seen, and I saw this in my own county here in Wabash, the solar ordinance specifically states they require the solar developer to post a bond. And they've got to put money up that if
they fail and the County comes and says, Hey, you've got to clean this up and they don't have the resources to do it. There's a bond they can tap and they can basically, so basically it's an insurance policy that the solar developer is buying and paying for. And they, have to maintain that throughout the life of the, of the development so that they are, there's money there that to clean it up and put it back the way it was. But Ted, there are a lot of nuances to this.
We require wires to be buried at least four feet underground so that you could still do deep tillage. We ask that those wires not be removed if and when the panels are removed. That way you don't have that tearing up the soil in addition to removing the posts. We make sure they replace or repair drainage tile that gets damaged when you drive the posts through the ground. There are lot of nuances to a solar development that as you as an attorney negotiate a contract,
You want to make sure things get added in to protect that landowner for what happens in 30 years when that developer pulls out and the panels go away.
Ted (22:52.718)
All too often what I see happening is, farm will go out and negotiate the transaction on their own, sign off on the contract and after they signed off on it, then they'll send it over to the lawyer and say, what do you think? So we might wanna reverse the order of that going forward.
Howard Halderman (23:05.904)
you
Howard Halderman (23:09.88)
Well, there are a couple other renewable things that are out there. One new one is poor space leasing, P-O-R-E. And so one of the initiatives you might read about is sustainable aviation fuel. A lot of the airlines are trying to move their fuel source to that. Right now, they're using a lot of used cooking oil from China to produce sustainable, or SAF, sustainable aviation fuel.
One of the things that we would like to do in the agriculture industry is to get our ethanol and certainly our soil oil to meet the standards to be qualified for SAF. The ethanol plants are looking at this and saying, okay, how do we clean up our emissions, our carbon footprint to comply? And one of things we're looking at is can we scrape the CO2 out of our emissions, put it under pressure, liquefy it, and then pump it underground?
And the geology in Indiana, and I'm not a geologist Ted, but what they tell me is that the geology in Indiana and Ohio allows, there's a layer down about 3000 feet underground, 3000 feet underground. They basically drive a well all the way down and they pump that liquid CO2 into a sand layer down there. It turns to rock, they tell me. And basically it's locked up.
So it's a way to sequester carbon 3000 feet underground. It doesn't get emitted into the atmosphere. And then maybe ethanol produced by that plant can qualify for SAF or that's part of getting it qualified. The pore space leasing, their leasing rights from the surface landowner. And so I want to be clear here, the landowner leases these rights to a slice of land 3000 feet underground.
They're getting paid somewhere in the neighborhood. state of Indiana has legislation. They have to pay them 60 % of the Purdue survey cash rent values that they publish every year. So you're talking $150 to $200 an acre that this landowner receives for this leased core space. The landowner can farm however they wish. The landowner can build houses. The landowner can mine sand and gravel. The landowner can do whatever they want with the property.
Howard Halderman (25:28.736)
and they still get that revenue stream. So it's different than solar and wind in the sense that those change the topography. This is way underground. There's an injection well that's on one person's location. There's a couple of monitoring wells, but outside of that, you don't even know that it's going on. And it's a 20 to 25 year life of the pumping that goes on.
Ted (25:52.91)
So what are you seeing in the ethanol market?
Howard Halderman (25:56.248)
You know, I don't see any new development. I don't see new ethanol plants being built, but by the same token, most of the ethanol plants that are already in production remain in production. Demand for ethanol, both domestically and we do export a fair bit of ethanol, that is remaining fairly steady. The question would be, can we get more E15 approved? More use of E85?
I don't see a lot of that moving the needle. Ethanol is a pretty mature industry at this point. And the positive is that it's balanced. Ethanol companies are able to make some money from time to time throughout the year. And therefore they remain open and consuming the corn. The real question would be, is there pressure from some environmental sector that says, you're a big CO2 emitter, you're not carbon neutral.
we're going to really force legislation that requires you to clean up your act, so to speak, or it doesn't qualify for SAF. And that could be some negative pressure on the ethanol industry longer term. But certainly there's nothing out there today that seems to be a risk in that regard.
Ted (27:09.55)
Well, let's talk a little bit about the farm bill or the lack thereof. What's your understanding of where we're at?
Howard Halderman (27:19.662)
Well, the farm bill expired, there was an extension, it expired a year ago, and then they extended it for a year. So technically as of today, it expired September 30. So we're operating without a farm bill. Now what I read is that there's no material big impact from that until the first of the year. So there's, but there have been more and more voices from agricultural industry sector leaders and a fair number of Congress.
men and women who are saying we've got to get something done. Now, 85 % of the farm bill is food and nutrition. So, you know, those kind of benefits, they go out more like welfare. But that 15 to 20 % that does relate to agriculture is really two buckets. One is the annual programs and the support prices that are in place from way back in 2016 are not close to where we need them to be.
for farm producers today. So the farm producer would like to see those support prices raised to a level that's a little more commensurate with production costs today. They wanna see the crop insurance title and subsidy remain as it has been. And I would anticipate both of those things probably occur in the negotiations. It's just a matter of getting Congress to sit down to try to actually negotiate and finalize a farm bill.
They've talked about doing it in the lame duck session. You know, it's not going to happen before the election. So does it get done in the lame duck session? That probably has a lot to do with who wins the election. Or is it something they push down the road to the next Congress? However, if they don't do anything, it reverts back to the 1940 bill. And there's a lot in the 1940 bill that doesn't apply to today's production agriculture, both positive and negative for one side or the other.
Ted (29:14.094)
It seems like, you know, if past history tells us anything, it seems that at some point they seem to always be able to reach an agreement on the farm bill and move it forward. We'll just have to see if history repeats itself again.
Howard Halderman (29:34.658)
Yes, it's been really arguably one of the better bipartisan efforts historically speaking. So you're exactly right. And hopefully that will play out again.
Ted (29:43.662)
Well, I think it's always because each side gets a little bit out of it. And that has kind of always been the perfect compromise. Having talked about the perfect compromise as it pertains to the farm bill, as it pertains to my practice, let's talk a little bit about what you're seeing on the estate tax front and what your thoughts are about how the increase in land value and the potential, not only, well, I shouldn't say the potential,
Howard Halderman (29:47.532)
Yes.
Ted (30:13.55)
the December 31st 2025 sunset provision, how that plays into the A community with respect to estate planning, particularly around the estate tax.
Howard Halderman (30:26.414)
It's great point. it's something that's concerning to me. The Trump tax cuts, or in this case, exemption increase that was put in place a number of years ago, they do expire at the end of next year. And so depending on who wins the election and depending on who wins Congress could have a lot of influence over what happens with that. You could easily see it be that if, let's say, Vice President
Harris wins election and nothing is done. Basically, nothing legislative happens with regard to those tax cuts. They expire. And then if they expire, you're looking at the exemption being cut in half, roughly. So all of a sudden that exemption is somewhere around $7 million per person. Well, if I'm a farmer out there and a landowner and I own a thousand acres of cropland, which is not unusual in the farmland space today,
And I've not done any estate planning. I haven't sought out Ted and got it done right. And if I haven't done any of that yet, and it's just in my name only, well, today I'm probably covered because $12,000, $13,000 an acre times a thousand acres. That's the $12,000, $13 million estate and you're under the exemption. Now you probably own equipment. You probably have a house. You probably have other investments. So those have to be factored in as well, but just on a farmland basis.
you can probably pass that on to the next generation and the farm survives. My concern is if nothing's done legislatively and the estate tax exemption drops in half, all of a sudden that landowner is now looking at a taxable consequence if they expire, they pass away. So what I'd like to encourage folks to do and the listeners is to talk to a professional like the Goodorth Group and make sure that
Do they have the right provisions in place to keep the farm operation survivable? What you don't want to have happen Ted is what we saw happen in the 1980s. And that was not so much due to legislation, but there was a farm family in Northwest Indiana. They owned 4000 acres. Dad died, I think in the 81 or 82 at the high of the market. It was appraised. A state tax was owed. The state tax at the time was roughly 50%.
Howard Halderman (32:52.846)
They had no debt when dad died. They borrowed 50 % of what the farm is worth so that they could pay the estate tax. In 1987, we sold that farm for farm credit services because they couldn't make the payments because of the big downturn and the ag depression that we experienced in the 1980s. So there was a lot of rash reasons for that. But I think of that example and think if some estate planning had been done,
and they had worked with somebody like you, could they have been in a position where dad passes and the farm doesn't have to borrow that much to cover the estate tax? And that's really the goal here is to make sure your next year heirs, the farm operation can survive from generation to generation. There's a lot of tools, as I understand it, out there available at their disposal. Depends on your circumstances and how much you have, but take advantage of the exemption that exists today.
and do something so that you can preserve the farm long-term.
Ted (33:54.926)
That's a good point you raised Howard, because between today, October of 2024 and December 31st of 2025, there is an existing law in place that says that the current exemption amount of $13.61 million per person, if you make the transfer between now and December 31st of 2025 and the exemption amount changes,
after that and you die, they can't claw back the gift that you made. In other words, I have clients today who are transferring $27 million to the next generation. What I think a lot of our prospective clients need to hear is that these kinds of transfers take a little time to get done. And so if we're going to do it, I would
tell everybody rather than wait to the last minute. True, the transfer has to happen before December 31st of 2025. Start your planning now. Certainly don't go any later than say July of 2025 to initiate the process to give your professional team sufficient time to put things in place so that the transfers can occur.
before the first of the year. And believe it or not, it is a hard deadline.
Howard Halderman (35:25.634)
Yes, it is. I think you would point out that even if you gift that amount, you can still retain control. You can still retain the rights to the income off those assets. So it isn't that you're just giving it to the next generation and it's totally out of your realm of control and how you operate the farm going forward and all of that. So there are some really great tools to facilitate it.
Ted (35:52.312)
You know, one of the interesting strategies that's been widely used over the last five years with respect to making these gifts is relatively unknown within the community. But typically, one of the key strategies that we look at, obviously, if we want to calculate what the estate tax is going to be, and we have a couple that's fairly young and healthy, we certainly
can take a look at buying life insurance to pay the estate tax. And the benefit to that approach is that it's simple. The downside is it requires the cash flow to be able to fund the life insurance. So that's not always available. If that's not available, there are still other things that can be done. Give me a simple example. Today, there is something called a spousal limited access trust. In the industry, it's called a SLAT.
So what happens is that a husband can create a trust for the benefit of their spouse, not their kids, not their grandkids, simply for the benefit of their spouse, transfer $13.6 million of value to that trust. The spouse, if they want, can be the trustee of that trust. They can have limited access to that trust. And yet when they die, it's completely out of their taxable estate. And done properly,
The wife can then set up a similar trust for their husband and therefore transfer those assets over and have $27 million removed from the taxable estate. Yet the transfers are made on behalf of a spouse, not having to transfer it down to a child or a grandchild. Many of our clients have expressed an interest in that concept and we are moving forward with some of those plans.
Howard Halderman (37:49.77)
Exactly, and that's a tool that I've heard, as you said, in the industry, the SLAT is the common terminology. And yeah, I would encourage clients to, if you think you have assets of something over 14 million, you need to be talking to a professional just to make sure you maximize the estate tax exemption opportunity that exists today.
Ted (38:12.128)
One of the things we also have to understand is with respect to the sunset of the estate tax, remember, we're also going to see the sunset of the income tax cuts that were made. So income tax rates are also scheduled to go up on January 1, 2026. Fortunately, the current capital gains tax will stay the same under that provision.
Howard Halderman (38:37.644)
Yes, and so that's another concern some folks have had is if I sell today, am I better off just paying the capital gains tax because we know it's at the lower 20 % rate in Indiana that's 25 all in when you have the state and the Obamacare tax on top. But you know what happens if it goes there's legislation that changes it back to 28 % or and those are risks obviously at any point in time but
maybe a little more so as we think about the next administration.
Ted (39:10.574)
Very good, Howard. Well, look, I've really enjoyed our conversation today. I always appreciate your insight on all these critical issues to our farm community. For those of you have an interest in moving forward with respect to either farm options or farm sales, farm management, appraisals, auctions, that kind of thing, Halderman Farm Management is a critical player.
widely recognized as being the real authority within the region. Thanks so much for being with us Howard.
Howard Halderman (39:43.608)
Hey, we appreciate the opportunity to talk about what we do every day and that's farmland values and farm incomes and agriculture is a great industry, Ted. It is just phenomenal people. Land is a long-term asset that returns excellent over the long-term. And so it's a fun space to play in and we appreciate professionals like you that help keep farms in the family.
and enable people to be able to continue to do what their passion is and what they hope for their next generations.
Ted (40:17.912)
Thanks again. Have a great weekend, Howard.
Howard Halderman (40:20.526)
Thank you.