Legacy Planning
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What’s My Gift Limit?
We had a reader ask the following question: “Can i give a lot of shares in a family farm corporation to my kids gift tax exempt. Is this just a one time thing.” The subject of gifts can be misunderstood for many farmers. In general, you can give up to $13,000 (the annual exclusion amount) to […]
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Another Estate Tax Goodie in Proposed Tax Act!
One of the newly proposed estate tax rules in the proposed tax act is the allowance of estates to combine both spouses lifetime exemption to maximize the estate tax savings. Under current law, if the first spouse passes away and if their estate is less than the current lifetime exemption, the excess is lost forever. […]
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How Will You Transfer the Farm?!
I ran across another thought provoking article in Cornhusker Economics. In the article, they performed an analysis of farmers in Nebraska based upon their ages. In 1982, 13,436 farmers in Nebraska were under age 35. In the most recent census in 2007, this number had dropped to 3,353 or a 75 percent decrease. The number […]
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What is My Step Up
In my last post, I gave an update on the current estate tax law and how it my apply to farmers for 2010. In that post, I referred to the term “Step Up” and I am using this post just to explain what the term Step Up or Step Down means. Up until this year, […]
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Estate Tax Update
I am currently in a financial investment conference in Chicago for a couple of days and during one of the sessions, the current estate tax situation was discussed. There appears to be at least 6 billionaires that have died this year and under the current law, they will owe no federal estate taxes, however, in most […]
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Dividend Tax Rates are About to Skyrocket
Congress back in 2001 dropped the maximum tax rate on dividends received by a taxpayer from 39.6% to 15% (plus any applicable state income taxes). But under the so-called Sunset Rule, these special low rates expire at the end of 2010. Beginning in 2011, the top rate is expected to go back to 39.6% and […]
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We Don’t Want a Partnership
One of my readers sent me a question about a farming operation that applies to many farm families. I am going to summarize the question as follows: Scenario: 160 acre cropland is titled as Kevin XXX and Mary XXX, JTWRS (50%) and The Jane M YYYY Trust (50%). Kevin and Jane M are brother and […]
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Where’s My Step Up
Some of my readers may have noticed that I have started writing a blog on the Agweb.com site. From my web traffic, I can see that many of those readers have checked out this site. I am honored to be doing the blog, but with three weeks left in tax season, I am hoping that […]
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The 3 P’s of Succession Planning
As advisors, we are actively involved in succession planning for farmers and other businesses. This is usually a long process and will change over time and as the generations involved grow and mature, their goals will usually change. There are three main goals related to this planning: Protect – The primary goal of any succession […]
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Some Steps to a Farm Transition
Having just recently returned from my taping for the Legacy Project on farm succession planning, I will be trying to do several posts over the next few weeks on this very important subject. Elizabeth Williams from the DTN/Progressive Farmer had a very good post on the five steps needed for the farm transition. The article […]