Farmers Need Permanent Fix for Estate Tax
Published
10/27/2020
The Tax Cuts and Jobs Act included an estate tax exemption, that expires in 2025. John Newton, American Farm Bureau Federation Chief Economist, says the current exemption covers transfer of assets up to $11.58 million.
“After December of 2025, that amount returns to a $5 million inflation adjusted level,” Newton said. “So, if we don’t get a permanent extension of the 11.58 million, or we go back to a lower exemption level, that really risks the family farm operations across the country.”
Newton says estate taxes are a tax on the transfer of property following a death.
“If you have asset values that are above that $11.58 million, those are going to be subject to the estate taxes, which can be as high as 40 percent,” Newton said. “If we potentially lower the estate tax exemption to 3.5 million, or an inflation adjusted five million, we’re looking at more assets out there being subject to additional taxes. And some are looking at that as a pay for to pay for other policy objectives.”
Newton says farmers need a permanent fix.
“A lot of folks often point out that it’s a small percentage of the farm population across the country that would be subject to these estate taxes. But when you look at USDA data, it’s actually a large percentage of the agricultural land area in this country that could be subject to these estate taxes upon death,” Newton said. “So, we urgently need a fix to help and protect the family farm operations.”
You can find a complete analysis on the Market Intel page at fb.org.
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