C&D llp - Certified Public Accountants & Advisors

When we first started our business in the heart of rural Santa Ynez Valley, accounting services for agricultural and farming operations were one of our principal mainstays. Today, over two decades later, we’re still working with farmers and ranchers across the State. Our experience has allowed us to become highly knowledgeable in many aspects of the agriculture industry.

Here are some of the things we're doing for our clients in agriculture.


	A PROACTIVE APPROACH A PASSION FOR THE NUMBERS An agricultural business needs to operate on the right numbers. In many cases the margins for profit are too small to absorb even minor accounting errors. To that end we are zealous in maintaining quality accounting and bookkeeping systems for our clients. The numbers not only must add up but they must make sense. Our firm takes great pride in interpreting those numbers that are critical to making sound judgments about which actions to take. There are no cookie-cutter solutions. Each farm, each ranch, each business must be understood and evaluated on it's own. To that end our approach has always been a proactive one. We visit the farms and ranches. We meet their employees. We study their operation. We look at how they fit in their industry. We work side by side with our clients to make sure there are no unforeseen problems lurking on the horizon. And no overlooked opportunities either. STRATEGIC THINKING FINANCIAL SKILLS - INSIGHTFUL ADVICE When we sit down to develop a strategic business plan for a client we begin with a thorough look at the business. We visit. We investigate. We study all the issues; the individual, family, land, industry and tax situation. Together we define some goals. We discuss how we might achieve these goals, we define objectives and plan how we can measure the results. We schedule regular meetings to identify any new opportunities and weaknesses and continue to monitor on-going performance, Creating a practical and workable plan is one thing but it's quite another to be able to put a plan into action. Today's market conditions present many challenges for both small and large businesses in agriculture. It's tough to go it alone and sound financial thinking and advice is a necessity.



	TAKING THE "FINANCIAL PICTURE" TAX PLANNING - FINANCIAL REPORTING The numbers don't lie. Or do they? Numbers can be deceiving especially if they don't show the entire picture. Just as deceiving can be the interpretation of those numbers. Farmers, ranchers and those that manage agricultural businesses need to be able to measure the true financial performance of their operation. Decisions can't be evaluated if the results are unclear. Over the years we've learned quite a bit about what it takes to run a profitable and sound agricultural business. We know from experience we need to really understand the operation before we can insightfully work with the numbers and present a clear, detailed and accurate financial picture. Without the right information there is always the risk of making the wrong decisions. Or making no decision at all. DETERMINING BUSINESS OR HOBBY HOBBY-LOSS ISSUES Anyone who’s been to the Santa Ynez Valley knows it’s home to many important ranching and breeding operations, including cattle, horses, and alpacas. We’ve helped our clients overcome many of the hurdles they have had to face along the way; such as defending their positions in hobby-loss issues. Needless to say, this is more than just a minor frustration. It is often a matter of economic survival and a threat to their way of life. Many ranchers simply could not survive without being able to claim their legitimate costs as expenses for tax purposes. From a tax perspective, perhaps the major problem faced by alpaca and horse ranchers and breeders is the risk of having the Internal Revenue Service define their business as a “hobby”. Because hobby losses are not deductible, this has the effect of depriving the taxpayer of the deductions and write-offs that are otherwise properly deductible in connection with managing the business. Internal Revenue Service regulations address the business vs hobby issue by providing a list of nine non-exclusive factors that must be considered in each case. All facts and circumstances present in a particular case must be taken into account when evaluating the nine factors. "Alpaca Ranching. Hobby or Business" discusses these factors.



	TRANSFERRING TO THE NEXT GENERATION This is one of the more critical issues facing family owned farms and ranches. For many farmers and ranchers this subject is the one that has the capability of causing significant problems if it is not addressed. We know that it's sometimes difficult for many to discuss with other family members. They don't know where to begin and hope that it will all work out in the end. Nothing could be further from the reality. A farm transfer involves a lot more than just writing up a will. There are many steps to go through to secure a successful and profitable transfer. Our advise to our farm and ranch clients is to start planning early. When the time comes to transfer the business, the process of planning for retirement will already be in motion. We discuss with our clients wide ranging issues as how they feel about keeping the business in the family to one of the major issues they will encounter when transferring operation: capital gains or estate taxes. There may be tax on the transfer of their farm or ranch. However, there are ways of minimizing capital gains tax and limiting estate tax implications. Sound financial planning and advise is essential.



	FARM AND RANCH APPRAISALS EXPERIENCE – TEAMWORK We are often retained by our clients when it comes time to purchase or liquidate some or all of their holdings. To determine a business' fair market value and to identify factors that enhance value requires close teamwork and a thorough understanding of the area and the property in question. Our long time working relationships with area bankers and realtors combined with our knowledge of our clients financial situation gives us an advantage in appraising or liquidating major properties. Our approach to analyzing a property for sale or purchase takes into account the complete picture: not only the valuation but the tax consequences, how this fits into our clients' estate planning, financing strategies, payment strategies. Just as important is knowing and really understanding our clients - knowing when to step in and when to get out of the way. It's all about building trust and relationships.

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