The ‘Preserving Family Farms Act of 2019’ would allow families to resume farm operations after the passing of a loved one by providing needed relief from the estate tax.
Paul Schlegel, vice president of public affairs for the American Farm Bureau Federation, offers additional insight into the matter.
“It essentially would allow a farmer or rancher, when the inherit land, to value that asset as agricultural land, as opposed to what a developer might pay for it,” Schlegel said. “By doing that, we’re hoping to keep more farms in operation by allowing heirs to continue farms and business.”
Oftentimes, developers will pay more than what land is worth.
“If a developer wants to come in and purchase it, they could pay a lot more per acre than you might otherwise get if you value it as agricultural. By relieving that burden on the estate tax, there’s far less tax liability for operators,” Schlegel said.
Schlegel applauds the move, which provides an update needed by farmers and ranchers.
“This particular provision has kept pace with inflation, but fallen woefully behind what land values are. By doing this, we’re hoping to catch up and ensure the tax burdens aren’t too great,” Schlegel said.