A pair of estate tax repeal bills introduced in Congress would help farm and ranch families overcome the challenges of passing their family businesses to the next generation, American Farm Bureau Federation President Zippy Duvall said in a letter sent Jan. 25 to members of the House and Senate.
Current law provides for an estate tax exemption of $5 million indexed for inflation, allows portability between spouses and includes stepped-up basis.
Despite this much-appreciated relief, estate taxes are still a big problem.
“Family-owned farm and ranch assets usually are tied to illiquid assets such as land, buildings and equipment. When estate taxes on an agricultural business exceed cash and other liquid assets, surviving family partners have few options other than to sell off farm and ranch assets, jeopardizing the viability of their business,” Duvall explained.
The bipartisan Death Tax Repeal Act of 2017 (H.R. 631, S. 205), introduced in the House by Reps. Kristi Noem (R-S.D.) and Sanford Bishop (D-Ga.) and in the Senate by Sen. John Thune (R-S.D.), would help protect the family farms that grow America’s food and fiber, often for rates of return that are already minuscule compared to almost any other investment they could make, according to Duvall.
In addition, AFBF and more than 55 other organizations that are part of the Family Business Estate Tax Coalition sent letters to Thune, Noem and Bishop thanking them for the legislation and their support for eliminating the estate tax.