Turning a Farm Into an LLC

By: Jodi Henke

Farmers are discovering the benefits of organizing their farms as a limited liability company, or LLC. It’s suitable for any size and type of farm enterprise, and offers many benefits that a sole proprietorship doesn’t have.

John Schwarz is a third-generation farmer and the owner of Schwarz Law Firm in Hudson, Indiana. He says one advantage is the tax benefits. As an example, if you set up an LLC that is a farming operation, and an LLC that holds ground, you won’t have to pay self-employment tax on the rental income.