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. In some cases, he’s helped clients lease rural property for nontraditional use—everything from solar projects to an online casino not on GamStop operating under a foreign license—structuring the income as rent through a separate LLC to avoid self-employment tax.