Legacy Planning
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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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Top Estate Planning Mistakes Farmers Make – Part 2
Continuing our post from yesterday: I am worth less than $5 million, so who cares? – Well, for one thing your spouse might care. We have a new estate planning opportunity called portability which allows the unused estate exemption to be transferred to the surviving spouse. So let’s assume you pass away in 2011 worth […]
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Top Estate Planning Mistakes Farmers Make – Part1
We have had several requests to recap Nick Houle’s presentation on the Top Estate Planning Mistakes that Farmers Make presented at the Commodity Classic last week. There are several of them, so I am going to break them down into three or four on a daily basis over the next week or so. The first three […]
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You Have 15 Months to Make Portablity Election!
One of the new features of the federal estate laws passed back in December, 2010 is the concept of portability. Under the old law, if a husband passed away with an estate of $500,000 and the lifetime exclusion was $3.5 million (the 2009 rules), the $3 million excess that was not used at his death […]
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Use a CRT for Retirement Equipment Sales
We had a reader ask the following question: “Is there any way to reinvest money from the sale of equipment(retirement) rather than pay ordinary income tax on it?” Most farmers when they retire have a large amount of income from selling the final crop and their equipment and many times very little expenses to offset […]
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Watch Out for Sales to Related Parties – Part Two!
On the last post regarding sales between related parties, my example was not 100% correct, so I have updated the post to more accurately reflect what the rules for related party sales. Thanks to the reader that pointed this out.