01/19/05 New tax laws should help farmers

Idaho Congressmen Mike Simpson and Butch Otter are among 60 co-sponsors of a bill that would permanently eliminate the death tax. A bill passed four years ago phases out the estate tax, eliminating it completely by 2010. Otter says that's the way it should be. OTTER "Unless we remove this sunset provision in 2011 it comes back in full force and so the government can walk away with 50 percent of the value of your property." In the meantime, some good news for farmers in the form of tax legislation that just went into effect. USDA tax expert Ron Durst says it improves the ability farmers already had to average their income over the past three years and perhaps pay a lower tax rate. DURST "One of the problems with that is sometimes that will also trigger an alternative minimum tax liability that can result in a sort of a loss of the benefits of income averaging. In this new tax bill now it will allow farmers to average their income without becoming subject to the AMT." The new law helps producers who had to sell an unusual number of livestock because of drought. Under the old bill farmers had two years to reinvest the proceeds from the sale without a gain for tax purposes. DURST "The new tax bill has extended this for four years." Today's Idaho Ag News Bill Scott