Example 4 of a Joint Ownership Record
January 7, 2009
The following is one of four examples of an annual financial record for jointly owned machinery, as referenced in Share Machinery, Reduce Costs — Developing a Joint Ownership Agreement.
Scenario: Farmer A and B decide on joint ownership of a new tractor. Farmer A plans to use the machine on 800 acres and Farmer B plans to use it on 1000 acres. Farmer B has agreed to pay for all costs and to rent out the machine to Farmer A on a per acre basis, based on all costs. Each signs an agreement. At the end of the year, the following information has been recorded.
In this example, Farmer B pays all costs, including the overall purchase. This example is only loosely a joint ownership agreement, as Farmer A does not acquire any ownership rights to the equipment. At the end of the year, Farmer B determines all costs, and the overall cost of annual ownership based on acres worked by both parties. Farmer A pays Farmer B for the total acres worked and the calculated per acre annual operator charge.