Farm Groups Focus on Estate Tax
The aim is to push Congress to take action before current provisions expire, significantly boosting the tax bill.
Compiled by staff
Published: Apr 17, 2012
Rising land values, higher farm asset costs have forced farmers to turn their attention to the need for better estate planning. First step there is to get Congress to enact a permanent set of estate tax rules so farmers and their families can plan ahead. A group of commodity, dairy, livestock and specialty crop industries is urging the House and Senate to enact legislation before the end of the year to provide permanent, meaningful estate tax relief.
The American Soybean Association is one of the farm groups making the push. The groups support keeping the $5 million per person as permanent, and retaining the top tax rate at 35%. And the groups say it's important that the estate tax law index the exemption to inflation, provide spousal transfers and included the stepped up basis. These are keys to preserving farmers that have expanded across the generations.
THINKING AHEAD: With key changes to the estate tax looming, farm groups are mobilizing. If Congress doesn't take the action on ASA's recommendations, the group notes that the exemption will drop to $1 million and the top tax rate above the exclusion amount jumps to 55%. "If estate taxes are allowed to be reinstated at the beginning of 2013 with only a $1 million exemption and top rate of 55%, the negative impact on our industry will be significant," the farm groups say. They added that the 2013 change to the estate tax law does a disserve to agriculture because "we are a land-based, capital intensive industry with few options for paying estate taxes when they come due."
This continued uncertainty over estate tax liability makes it difficult for family-owned farms and ranches to make sound business decisions.
In letters to both chambers Friday, ASA encouraged Congress to show its support for "permanent and meaningful estate tax relief" with the co-sponsorship of bills reforming the estate tax. In the House, Rep. Kevin Brady (R-Texas) has introduced the Death Tax Repeal Permanency Act (H.R. 1259), while Sen. John Thune (R-S.D.) has advanced the counterpart Senate bill of the same name (S. 2242).
"This action will strengthen the business climate for farm and ranch families while ensuring agricultural businesses can be passed to future generations," continued the groups. "Allowing estate taxes to be reinstated without an exemption and rate that protects family farms puts many operations at risk and threatens succession to the next generation of farmers."
Permalink: Click here
Tagged: ASA, livestock, soybean association, American Soybean Association, land values
|