Farm Estate Taxation

 Maybe you can’t afford to sell the farm. Yesterday I said maybe it’s time to sell the farm because of all the politically correct bull..errhhh make that ideas that bring manure to mind , zero tolerance for anything ecologically unfriendly like pesticide drift. Whew! But now, congress is running out of time to address the confusion facing estate taxes.  Under the current law, the tax will be repealed at the end of the year, but    “as a trade-off we lose part of the stepped-up basis and that means farmers and ranchers will pay more capital gains taxes when they sell a piece of property.  And at the end of 2010 estate taxes will come back but at a very low exemption level, one million dollars per person and a very high rate, 55 percent.”

 American Farm Bureau tax specialist Pat Wolff says a million dollar exemption may sound like a lot of money  “ but it doesn’t get you much of a farm and it certainly doesn’t get a farm big enough to support a family. Farms are capital intensive.  To be a farmer you have to have land; you have to have equipment and that costs a lot of money.  If you take a farmers land and equipment away from them to pay a tax when a family member dies, he not only loses his farm but he loses the way he earns his living.”

 The house of representatives has already passed a permanent extension of the current law which calls for $3.5 million per person exemption level and a top tax rate of 45 percent.  But it’s up in the air whether they’ll get to estate taxes before the year ends. It seems to me we need more farmers in congress and fewer community organizers.