A bill recently introduced to help more farm families continue their livelihoods after the death of a loved one has the full support of the American Farm Bureau Federation (AFBF). The Preserving Family Farms Act of 2019 is sponsored by U.S. Reps. Jimmy Panetta (D-Calif.) and Jackie Warlorski (R-Ind.).
“Farm and ranch families often face a significant financial burden when they have to pay estate taxes,” AFBF President Zippy Duvall said. “Farm families should be able to pay based on how their land is actually used, rather than its potential value as commercial property such as a shopping center.”
The legislation modernizes the special use valuation provision of the estate tax. This valuation allows property to be appraised as farmland rather than its development value when determining estate taxes.
“AFBF commends Representatives Panetta and Warlorski for introducing the Preserving Family Farms Act of 2019, which will give more families hope they can hold on to the farm when a loved one passes,” Duvall said. “We strongly urge House members to co-sponsor this important bill.”
Increasing the amount of farmland or ranchland that can be valued at agricultural value rather than development value would help protect family-owned farm and ranch businesses by assessing estate taxes on the actual value of the businesses they have spent decades building.
“Allowing more farmland to qualify for special use valuation would elevate this provision of the tax code to its proper place as a helpful estate planning tool,” Duvall said.
The Preserving Family Farms Act of 2019 increases the maximum amount allowed under the exemption from $750,000 to $11 million (indexed for inflation), thus reviving a critically important tool in the toolbox for farm and ranch families across the U.S. If enacted, this legislation will provide a permanent solution to an issue that has long plagued farmers and ranchers.
Why is there an estate tax at all. We have paid our taxes every year as a family. Now the government wants more money.
My family immigrated from Germany in the 1840s and we were originally Mexican citizens. Our family immigrated to agriculture. If our family over the generations would have been subject to estate taxes every time one of our parents passed we may not B farming because of having to pay the taxes on the estate that we’ve done paid to earn it. Over my lifetime I have seen families have to sell off their hard-earned land and liquidate part of their Estates just to pay inheritance taxes. What a waste of hard work and innovation of families. As Cities encroach on our farmland and the price of farmland go straight up in value we as Farm families tend to lose our way of life. This bill Mets save many Farm families from losing their hard-earned way of life.