Congress considering bill to exempt farms & ranches from estate tax
By Melissa Coon © Copyright Agri-Pulse Communications, Inc. According
to the American Farm Bureau Federation, estate taxes are especially harmful to
famers and ranchers because their businesses are capital-intensive with a high
concentration of assets tied up in land, buildings and equipment. When estate
taxes exceed cash or liquid assets, surviving family members may be forced to
sell land, buildings, or equipment necessary to keep the business going. “Allowing
family farms and ranches to be taxed out of business will put our national food
security and global competitiveness at serious risk,” said NCBA President Steve
Foglesong. On
January 1, 2010 the estate tax temporarily expired. However, unless Congress
takes action by the end of the year, the tax will return in 2011. In this case,
anything above $1 million will be taxed at 55 percent. “If
Congress fails to act before the end of the year, it will be a death sentence
to family-owned operations,” Foglesong continued. “The Thompson bill would help
hardworking farmers and ranchers keep their land and operations intact for
future generations.” The
death tax is considered one of the leading causes of the breakup of
multi-generation family farms and ranches. Eliminating it would ensure that
farmers and ranchers are able to keep their businesses in the family. “Without
specific agriculture relief, we’ll see family-owned ranches torn apart and
converted into ‘ranchettes’ and subdivisions,” said PLC President Skye Krebs.
“Instead, the Thompson bill would allow these lands to stay in production
agriculture, supporting both healthy rural communities and the preservation of
open space and wildlife habitat.” The
estate tax makes it difficult to keep farms within the family. However, H.R.
5475 would defer the estate tax for as long as the operation remains in
agriculture. If the owner were to either stop farming or sell the property, a recapture
tax would be imposed. The bill would also allow farmers and ranchers to qualify
for a more generous tax deduction for land donated to a conservation easement. To return to the News Index page, click: www.agri-pulse.com #30