A new IRS rule could make the death tax a reality for farmers.
Two words strike fear in the hearts of many—death and taxes.
Do not worry yet.
Several congressmen are fighting this new rule.
According to a recent Illinois News Network article titled “Congressmen plan to defund new IRS rule making more farms eligible for ‘death tax,’” U.S. Representative Randy Hultgren, a Republican from Plano, is leading the charge.
He has proposed legislation to defund the enforcement of the IRS rule where it impacts interests in any family farm passing to the next generation, resulting in a 40 percent federal estate tax.
His ultimate goal?
To save family farms from corporate farms who would prey on the smaller farms forced to pay this tax.
The federal tax would be added to the already 26 percent inheritance for the state of Illinois on assets at or greater than $4 million.
Although the federal government claims to provide assistance for small family farmers, the help is minimal.
The federal government provides for a "loan" to pay off the tax with interest.
In the past, few family farms have had to pay the federal estate tax; however, with the new legislation, this would change.
Prime Illinois farmland is currently appraised around $11,737 per acre.
At this rate, a farm of just 460 acres would trigger the federal estate tax.
Any structures, livestock or machinery would trigger the tax at less than 460 acres.
Needless to say, the IRS rule would make proper estate planning even more critical to farmers.
Be sure to contact an experienced estate planning attorney if you or your loved ones make a living off of the land.
So, how do you find an "experienced" estate planning attorney?
First, ask around. Friends, family and other professional advisors are trustworthy sources.
Second, conduct an "organic" search on "Google" for "estate planning" near you (e.g., "Estate Planning Anytown MoKan").
Third, either way, verify! Check out the education, experience, ratings and client reviews of any attorney before you contact him or her.
In fact, I use both of these services to thoroughly vett attorneys before referring members of our "client" family for legal help in other areas of law or for matters in jurisdictions outside Kansas or Missouri.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Illinois News Network (October 19, 2016) “Congressmen plan to defund new IRS rule making more farms eligible for ‘death tax’”