Agribusiness BlogFarm CPA Today

Legacy Planning

  • 2012 Interest Rates for Special Use Valuation

    The IRS today posted Revenue Ruling 2012-26 which lists the applicable interest rates  (go to page 3 of release for the actual ruling) available if an estate elects Special Use Valuation in valuing farmland.  Special Use Valuation allows an estate comprised primarily of farmland (or other qualified business property) to elect to value the farmland […]

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  • Mistakes to Avoid in Lifetime Giving – Final

    This post has our final mistakes to avoid in doing lifetime giving: If you are doing Medicaid planned gifts, remember that all transfers for less than FMV are subject to a lookback period of 60 months. Avoid gifts of installment contracts to anyone other than a spouse.  A disposition, which a gift is, will result […]

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  • Mistakes to Avoid in Lifetime Giving – Part 2

    We continue our series on mistakes to avoid in lifetime giving: Be aware of the Generation-skipping Transfer tax on any gifts that may involve your grandchildren.  These gifts can subject you to additional gift taxes that you may not realize apply when you make the gift.  Any gifts in excess of $13,000 to these beneficiaries […]

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  • Mistakes to Avoid In Lifetime Giving – Part 1

    Lifetime giving of appreciating assets is one great tool to use to prevent unnecessary estate taxes.  However, if done incorrectly, these gifts can prove costly. I will do a multi-series post on some of the mistakes to watch out for in the next few days: If you will pay for someone’s education or medical costs, […]

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  • IRS Required Interest Rates Drop Even Lower

    Every month the IRS posts a listing of the required interest rates that parties must put into loan contracts to prevent imputing of interest.  For several months, these rates have been dropping lower and lower.  For the month of August, short-term notes (less than 3 years) now require an interest rate of .25%.  Mid-term loans […]

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  • Senate Makes No Proposed Changes to Estate Tax in Extension Bill

    Senate Democrats removed any mention of the estate tax in a Bill that is currently headed to the floor.  This propsed Bill will now extend the 2001 and 2003 “Bush” tax cuts for families earning $250,000 or less. An earlier version of the Bill would have included a maximum estate tax rate of 45% while dropping the exclusion […]

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  • With Low Interest Rates, Special Use Valuation May Not Save Much Estate Tax

    With the explosive increase in cash rents and the continued decrease of interest rates, the savings by electing special use valuation for estate tax purposes may not be available in 2012. One of the special estate tax provisions for farmers is the option to elect to reduce the value of the estate to reflect the […]

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  • Present is Better Than Future!

    Many farmers have created limited partnerships or limited liability companies (LLC) to hold their farmland.  As part of this process, gifts are made to children and grandchildren for estate planning purposes.  For 2012, each person can give $13,000 (most likely rising to $14,000 in 2013) to as many people as they want and not have this gift counted […]

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  • Elimination of Estate Tax Bill Proposed in Senate

    Senator John Thune, R.-S.D. has introduced the Death Tax Repeal Permanency Act S. 2242, which would permanently abolish the federal estate tax.  The Senate bill is identical to H.R. 1259 introduced by House Representative Kevin Brady, R-Texas.  The tax is currently set at 35% on estates over $5 million.  However, beginning January 1, 2013, the […]

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  • Top Estate Planning Mistakes Farmers Make – Part 3

    We conclude our series on the top estate planning mistakes farmers make today with: Treat all the kids the same – In our seminars on this subject, the question of how to treat farm and non-farm kids can be the most vexing issues for farmers.  Many farmers who control the farm and only pass down […]

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