Monday, November 26, 2012
As I have previously discussed, many farmers and ranchers are worried about the decrease in the estate tax exemption and the rise of the estate tax rate. Farmers and ranchers are equally worried about the possibility that Congress will be unable to compromise on an agreement that will prevent the country from going over the "fiscal cliff." As a result, many farmers are selling their farms before the increase in both the capital gains and estate tax.
Some lawyers in Iowa believe that if a person is considering selling the family farm they should complete the sale before the end of 2012. Many people are heeding the warning. Some lawyers have reported a drastic increase in the number of farm sales. The rising price of farm land has also helped those looking to sell. Still, there is a problem with the overall scheme. While many are trying to seek tax relief, the money that they those people make from their farmland might be more than they would receive from investing the windfall they would receive from the sale. In other words, the savings that they would obtain under the favorable tax rate might not be worth it, in light of their land's ability to produce income for them.
See Farmland Sales Brisk Because of Tax Law Changes, SFGate, Nov. 25, 2012.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.