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Home » Estate Planning » Farmers Get Break Via New Tax Act

Farmers Get Break Via New Tax Act

February 18, 2013 by John Potter

Some people who are potentially exposed to the estate tax would not consider themselves to be “wealthy.” They earn a decent living as farmers, but they are certainly not living the lifestyles of the rich and famous.

Many farmers own large pieces of land that have been in the family for generations. Over time it has appreciated considerably, and its value may exceed the estate tax exclusion amount.

This concern weighed heavily on the minds of many farmers as 2013 approached. Without new tax relief legislation, the estate tax exclusion was scheduled to be reduced to just $1 million in 2013. In 2012 it was $5.12 million.

That is quite a significant difference, and the maximum rate of the tax was scheduled to rise from the 35% that was in place in 2012 to 55%.

Farm families received some good news when the American Taxpayer Relief Act of 2012 was passed.

The president had mentioned a figure of $3.5 million as a compromise with regard to the estate tax exclusion. Many people in the estate planning field felt as though this may be where the estate tax exclusion would land in 2013.

Fortunately for people who own valuable farmland, the base estate tax exclusion of $5 million remained in place after the passage of this act, with ongoing adjustments for inflation. As a result we have an exclusion of $5.25 million in 2013 which is actually bigger than it was in 2012.

This may be a relief for many, but you never know what the future holds. Always keep in touch with your estate planning attorney so that you can make adjustments if and when they become necessary as laws change in the future.

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Filed Under: Estate Planning, Taxes Tagged With: Estate Planning, Estate Tax, Inheritance Planning

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Overall The Potter Firm was very professional. They took what could of been a very complicated process and were able to break it down so it was a lot easier to understand. We are confident we now have made the right decisions in our estate planning. Good firm to work with.

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John Potter has been a real pleasure to work with. He is very knowledgeable and explains things in a very simplistic manner so the average person can understand how/why the laws are written. He is very attentive and asks questions in such a way that not only helps him understand your goals, but also helps you think about what type of goals and expectations you should be considering. Exemplary client service.

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My husband and I selected Ms. Potter to assist with our small business. She responsive and attentive every time I have a question or need assistance, and is extremely knowledgeable and able to answer any legal question I have had. I know I can count on Ms. Potter for all of my business legal needs and I would highly recommend her to anyone needing legal assistance with such.

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