Despite what the media has decided are the important stories for this election, there are some real issues out there that have a real impact on real families.
Likewise, interpretations of regulations by the IRS can change, leading to additional tax liability for family farms. Most recently, the IRS has proposed changes to the estate tax regulations regarding the valuation of business assets. The American Farm Bureau Federation has cautioned that this change may result in family farms seeing an increase in estate tax liability, and has urged members to contact their congressional leaders to support proposed legislation prohibiting the change.
Despite favorable provisions, the death of the family’s patriarch or matriarch may still result in a family farm being divided up and sold off to pay the taxes. Farmers are usually considered cash poor, because their money is tied up in assets, especially land. When the value of a deceased’s estate goes over the exempted amount, the hefty tax has to be paid whether the estate actually has the cash to do so. Many times, that means farmland, equipment, or buildings have to be sold to pay Uncle Sam. For children that wanted to keep farming, this scenario could dash their dreams.
In an election that has been filled with the scandalous and salacious, there is hardly room for estate tax discussion on the campaign trail. For family farmers though, the very real possibility that it could result in their farm being divided up and sold upon their death makes this issue extremely important and relevant. There are many issues that voters should take into consideration when making their choice on Election Day, but the future of the estate tax should definitely be one of them.