Just before the August recess began, Congressmen Mike Thompson and John Salazar introduced a bill that would provide an exemption from the estate tax to farms and ranch lands that are passed down and kept in agricultural production.The bill, H.R. 3524, is called the Family Farm Preservation and Conservation Estate Tax Act and can be accessed by clicking here. Ken Anderson, writing for Brownfield’s Ag News, reports that the National Cattleman’s Beef Association (NCBA) is in favor of the legislation. To read Anderson’s story click here. Indeed, the NCBA has issued a news release praising the bill that can be accessed by clicking here.
Under current law, estates for individuals valued over $3.5 million, or $7 million for couples, are taxed at a rate of 45%. However, the current law is set to expire at the end of 2010, meaning that in 2011 the tax rate for estates valued at $1 million or greater will be 55%. The Obama Administration is in favor of freezing the estate tax at its current rate.
Under H.R. 3524 farm and ranch lands that are actively being used for agricultural production would be exempt from the estate tax if the land is kept in agricultural production when it is passed on. If the land ends up being sold at a later date for a purpose other than agriculture, then a recapture tax would kick in. H.R. 3524 has been submitted to the House Committee on Ways and Means, which is the committee tax legislation must go through before becoming law.
Posted: 08/05/09
