by Ken Root
There is nothing more serious than taxes to farmers and ranchers. Each generation risks the break up of assets due to estate taxes or other changes in the tax code that tighten the rules.
Congress may repeal the estate tax but a move is afoot in the IRS, and endorsed by the current administration, that could impact everyone who inherits land or other property.
The Obama administration may make changes in the tax code before January 20th that could impact the process and taxes on farm assets.
American Farm Bureau, National Cattlemen, and other farm groups argue the Internal Revenue Service proposal would end or reduce provisions that hold down the value of farm assets and thereby reduce estate tax liability. The changes have not set well with rural America.
the IRS acknowledges that, with some 10,000 comments filed, it won’t be able to finalize the rule before the Trump administration takes over.
“The new administration could withdraw it, that would be the best thing that could happen,” AFBF Tax Advisor, Pat Wolf said. “They could fail to finalize it, which would leave it hanging out there. Not implemented, but not good because it’s hanging out there. Or congress could act to block the change.”
The AFB’s longtime goal of ending the estate tax altogether? Wolff sees better odds after January 20th. “That’s not likely to happen on it’s own. It will be part of it fundamental tax reform, which the new congress has pledged to take up in January.”
Wolff cautions it won’t be a slam dunk since someone could try to take out or change estate tax repeal.
The estate tax impacts only those families that have large assets. The stepped up basis would have tax consequences for every heir.