fbpx

New IRS Rule Might Make More Farmers Eligible for “Death Tax”

Death tax

U.S. Representative Randy Hultgren, R-Plano, explained that the new IRS rule calculates interest in the value of family farms that would be left to the next generation of farmers. This, in turn, results in 40% more in federal estate tax. Hultgren’s legislation would defund the enforcement of the new IRS rule. “The IRS would not be able to use any appropriated funds to enforce this rule,” Hultgren said.

Hultgren said the new tax regulation will, in effect, assist the big corporate farms that have the resources to purchase the land that small farmers would need to sell just to pay the tax. Those with the cash can come in and buy at fire sale prices: the large corporate-owned farms, he said.

The state of Illinois has an inheritance tax of 16% that begins at $4 million in total assets.

The federal government has enacted measures to help farmers who would be hit with a large estate tax. However, this is really just a loan to pay off the tax over time with interest. In the past, a small number of family farms have been subject to the federal estate tax due to exemptions and loopholes. The Tax Policy Center reports that only 120 farms paid the estate tax in 2013. The new tax regulation, Hultgren said, might see that number skyrocket. He thought the cost of estate planning could be reinvested into the farm.

The Illinois Society of Professional Farm Managers and Rural Appraisers says that an acre of high-quality farmland in the Land of Lincoln is worth on average $11,737 per acre. About 460 acres of farmland at that price would trigger the federal estate tax, not counting valuation of machinery, structures, or livestock on the farms.

Reference: Illinois News Network (October 19, 2016) “Congressmen plan to defund new IRS rule making more farms eligible for ‘death tax’”

 

Like this article?

Share on facebook
Share on Facebook
Share on twitter
Share on Twitter
Share on linkedin
Share on Linkdin
Share on pinterest
Share on Pinterest

Leave a comment

LIKE THIS POST?

We have a LOT more where that came from!

We hate spam too. We will never share or sell your information.

Call Now ButtonCall Us Now https://jsfiddle.net/7h5246b8/

Request a free consultation

We hate spam too. We will never share or sell your information.

We've been putting together as many resources as possible so that we can continue to help:

  • If you’re a current client with a signing appointment or a prospective client with a consultation and would prefer that meeting take place in your own home, we can accomplish that with a little bit of pre-planning on our part and with the addition of a laptop, smartphone, tablet or other computer in your home to facilitate this virtual meeting. For those of you that need to sign legal documents, that too can be accomplished with the use of a webcam (FaceTime etc.), so that we can witness and electronically notarize all of your important legal documents.
  • We launched the rollout of our on-demand webinar early so that new clients and our allied professionals can view the important component parts of ‘an estate plan that works’ at their convenience.  That is available on our website.
  • Live video workshops will be produced as quickly as possible and certainly ahead of our previous schedule; we will keep you posted as these events become available. Given the ‘boutique’ nature of the firm, we rarely have more than ten people in our office including team members at any one time. During this period of ‘social distancing,’ we promise to have no more than 8 people at any time.   This allows us to comply with the Governor’s directive to limit in-person gatherings.
  • The best way to communicate with us is still by phone during regular office hours of 8:30 to 5:00, Monday through Friday, or, you can email any of our team members (that is, their first name followed by @zarembalaw.com).  We will respond to these emails as quickly as possible.
  • Please continue to follow the directives of our local, state, and federal agencies. For your health and in consideration of our team who is assisting you, if you’ve scheduled an office appointment or planned to drop off paperwork and are experiencing a fever, dry cough, or shortness of breath, please contact your primary care doctor for guidance and then our office to reschedule.

Thank you, Walt and the Zaremba Team

Coronavirus/Covid-19
Update to our Process

The unprecedented coronavirus pandemic has taken our entire country by surprise. We understand how difficult this time is for America’s businesses and families.  However, we believe it is vitally important that we make every effort possible to continue to offer solutions that avoid disrupting our important partnership with you, your family and friends.  As you know, estate planning is not something that should wait for a more convenient time, therefore the opportunity to address your important goals both during and after this crisis should not wait.  To that end, we have added the option of a ‘virtual consultation’ to our office process.  You will now have a choice of either meeting with us in our office or in the comfort of your own home.