Estate Tax Update

Senate Finance Committee Chair Max Baucus told the Great Falls Tribune (Montana) that he wants to protect an estate tax reduction from any deal averting the fiscal cliff. In the interview with his hometown newspaper Baucus said he is working to preserve a reduction in estate taxes that exempts the first $5 million of an estate’s value for individuals and taxes the remainder at 35%.

Tax cuts, which help farmers and ranchers pass their agriculture assets on to their children, expire at the end of 2012. Without action by Congress, only the first $1 million of an estate will be exempt from taxes, and everything over that will be taxed at 55%. All family owned business needs to be aware of these looming changes in tax policy and the uncertainty over there extension beyond December 31, 2012.

Many agricultural organizations have written letters to Congress urging senators and representatives to act immediately and permanently renew the current estate tax provision, until such time as full repeal is possible — a move that will give farmers and ranchers the certainty they need to conduct business.

The current state of the economy, coupled with the uncertain nature of estate tax liabilities, makes it difficult for any family-owned business to make sound business decisions.

We urge members to contact their Representative and Senators, Congress needs to know this is an important issues for family-owned business’, both on and off the farm.