[glockman66]

Example from the article: 20 years ago the son inherited a farm from his dad and paid a $2 million "death/inheritance tax". Under Obama, the farmers sons will have to pay $13 million "death/inheritance tax". I would imagine that any family business/farm will also suffer the same fate if it is high enough in $value$ under the Obama redistribute the wealth agenda.



http://www.foxnews.com/politics/2012...ntcmp=trending
Ranchers, farmers brace for 'death tax' impact
By William La Jeunesse Published November 16, 2012
FoxNews.com

"Ironically, many nations historically more concerned with class and wealth -- namely Russia and China -- have since abandoned their estate taxes."

[MtBaldy]

None of the idiots who voted for Obama are likely to be inheriting multimillion dollar farms so I'm sure this is just fine with them.

[jollygreen]

These "ranches" are subject to the same limitations as any other inheritance, right? Say, the total inheritance is $4.5 million. And the tax begins at $5 million. Then there is no death tax on the farm since it's not over $5 million.

Is this correct?

[Brucev]

Originally Posted by jollygreen

These "ranches" are subject to the same limitations as any other inheritance, right? Say, the total inheritance is $4.5 million. And the tax begins at $5 million. Then there is no death tax on the farm since it's not over $5 million.

Is this correct?

Do not confuse people with the facts. They are inconvenient.

[pesticidal]

Originally Posted by jollygreen

These "ranches" are subject to the same limitations as any other inheritance, right? Say, the total inheritance is $4.5 million. And the tax begins at $5 million. Then there is no death tax on the farm since it's not over $5 million.

Is this correct?

Currently, the federal government taxes estates worth $5 million dollars and up at 35 percent. When the Bush-era tax rates expire in January, rates increase to 55 percent on estates of $1 million or more. While some Republicans want to eliminate the death tax entirely, President Obama has proposed a 45 percent rate on estates of $3.5 million and up.

Read more: http://www.foxnews.com/politics/2012...#ixzz2CiTUnXxI

[Chuck TX]

Originally Posted by jollygreen

These "ranches" are subject to the same limitations as any other inheritance, right? Say, the total inheritance is $4.5 million. And the tax begins at $5 million. Then there is no death tax on the farm since it's not over $5 million.

Is this correct?

Was.

$1 million per person federal estate tax exemption and a 55% effective top tax rate scheduled to go into effect on January 1, 2013.

[Wolfgang]

Originally Posted by jollygreen

These "ranches" are subject to the same limitations as any other inheritance, right? Say, the total inheritance is $4.5 million. And the tax begins at $5 million. Then there is no death tax on the farm since it's not over $5 million.

Is this correct?

if this was correct it would be correct....the $5 million is going back to $1 million, so that is correct or not?

of course it may be changed and stay $5 million, but the rate may change to more than 50%

[Deanster]

Not entirely sure how a family that owns farmland worth $5 million figures they shouldn't be taxed the same way as someone who owns $5m in stocks/bonds.

Whether what you own is a farm, a beach resort, or swampland, stocks, bonds or cash, there's a tax on the value that's handed down, when the total value is in the millions. I don't have a huge problem with this.

[Z71bill]

Originally Posted by Deanster

Not entirely sure how a family that owns farmland worth $5 million figures they shouldn't be taxed the same way as someone who owns $5m in stocks/bonds.

Whether what you own is a farm, a beach resort, or swampland, stocks, bonds or cash, there's a tax on the value that's handed down, when the total value is in the millions. I don't have a huge problem with this.

Forcing the family to "sell the family business" to pay the taxes is the issue.

I see (and agree) your point about why the difference - this is it.

BTW - I disagree with you - letting the government take 50+% of everything I have worked for (over $5 million or some other number) is wrong. Good chance the value in an estate has already been taxed.

What possible basis does someone use to think it is OK to take half of a person's assets?

[jpa]

Someone posted a link to this story on FB before. My question is why isn't the family farm owned by a family trust? Screw uncle sam, when family dies the only thing that changes is the beneficiary and the trustee. No inheritance taxes that way because the ownership never changed.

I'm surprised the idiot father didn't spend a couple grand to see a lawyer about this since he already paid a $2m tax and is set to pay another $13 if he kicks off. Fools and their money....

[janice6]

Remember the good old days when we were assured government was not going to take away our guns? Now it's take (tax) away our homes.

[Glock20 10mm]

Originally Posted by Deanster

Not entirely sure how a family that owns farmland worth $5 million figures they shouldn't be taxed the same way as someone who owns $5m in stocks/bonds.

Whether what you own is a farm, a beach resort, or swampland, stocks, bonds or cash, there's a tax on the value that's handed down, when the total value is in the millions. I don't have a huge problem with this.

I disagree, especially on properties that have already been paid off. Taxing someone annually for the theoretical value is akin to theft in my opinion. I suppose if they SOLD the property then taxing the INCOME from that sale would be valid (even though I don't like that either...) But if someone leaves you something that's a gift and it should not be taxed, especially if it's already paid off OR doesn't provide a source of credible income.

[LoadToadBoss]

Originally Posted by Deanster

Not entirely sure how a family that owns farmland worth $5 million figures they shouldn't be taxed the same way as someone who owns $5m in stocks/bonds.

Whether what you own is a farm, a beach resort, or swampland, stocks, bonds or cash, there's a tax on the value that's handed down, when the total value is in the millions. I don't have a huge problem with this.

The primary issue is liquidity. Stocks and bonds are highly liquid assets. Farm land and buildings are not. Stocks and bonds also have an active market; farms do not.

Secondary to liquidity is the idea of personal property rights. What right does the government have to tax the property of a decedent that passes through to beneficiaries.

An alternative would be to allow the property to pass to beneficiaries at the adjusted basis of the owner instead of the allowable step-up basis or the fair market value at the time of death. When the beneficiaries dispose of the property, then the beneficiary pays the capital gains rates that apply at the time. If the property continues to be held and passed down from generation to generation, then any capital gains will be suspended until the property is sold.

Alternatively, small family farms should incorporate. Assets of the corporation are outside of the estate and the corporation continues to exist after the farmer has died.

[cowboywannabe]

Originally Posted by jpa

someone posted a link to this story on fb before. my question is why isn't the family farm owned by a family trust? screw uncle sam, when family dies the only thing that changes is the beneficiary and the trustee. No inheritance taxes that way because the ownership never changed.

i'm surprised the idiot father didn't spend a couple grand to see a lawyer about this since he already paid a $2m tax and is set to pay another $13 if he kicks off. Fools and their money....

this...

[JW1178]

Well, what is going to happen is a lot of farms going up for sale with nobody to buy them, so the land value will drop so much, things will be where they once were. I bet Obama's people didn't figure that into the math.

The sad fact is that a 1,000,000 farm doesn't bring in the revenue that makes it worth investing into if you have 1,000,000 to invest. So unless you inherit it, it's hardly worth it.

Obama's estate taxes that he's planning is just going to further hurt the housing market and our economy.

To Obama, it's not about standing tall and reaching high, it's about stooping down and picking up and carrying those who won't stand on their own. We were once reaching for the stars, now we are fishing in the sewers.

[JW1178]

Originally Posted by jpa

Someone posted a link to this story on FB before. My question is why isn't the family farm owned by a family trust? Screw uncle sam, when family dies the only thing that changes is the beneficiary and the trustee. No inheritance taxes that way because the ownership never changed.

I'm surprised the idiot father didn't spend a couple grand to see a lawyer about this since he already paid a $2m tax and is set to pay another $13 if he kicks off. Fools and their money....

THIS!!! There are ways around everything, but I bet when Obama's team crunched the numbers, they didn't consider this factor. So unless this is changed, which won't be easy at all, all this revenue he has already signed checks for, won't be there, and then cost will excede plan like every other govt spending program. The fiscal cliff, not only are we approaching it at a rapid rate with Obama kicking in the afterburners, but the cliff is heading towards us.

[Z71bill]

Originally Posted by jpa

Someone posted a link to this story on FB before. My question is why isn't the family farm owned by a family trust? Screw uncle sam, when family dies the only thing that changes is the beneficiary and the trustee. No inheritance taxes that way because the ownership never changed.

I'm surprised the idiot father didn't spend a couple grand to see a lawyer about this since he already paid a $2m tax and is set to pay another $13 if he kicks off. Fools and their money....

Say a person sets up a trust contributing $10 million in assets -

Any gift taxes due?

Its been 25 years since I did any trust tax work - but it sure seemed like you got dinged with gift taxes when you first set it up.

Is my memory defective or did the laws change?

[jpa]

Originally Posted by Z71bill

Say a person sets up a trust contributing $10 million in assets -

Any gift taxes due?

Its been 25 years since I did any trust tax work - but it sure seemed like you got dinged with gift taxes when you first set it up.

Is my memory defective or did the laws change?

You're probably right but really? The guy has $2mil to pay the IRS but can't spend a couple grand sitting down with an attorney?

[elsolo]

Originally Posted by Deanster

Not entirely sure how a family that owns farmland worth $5 million figures they shouldn't be taxed the same way as someone who owns $5m in stocks/bonds.

Whether what you own is a farm, a beach resort, or swampland, stocks, bonds or cash, there's a tax on the value that's handed down, when the total value is in the millions. I don't have a huge problem with this.

The farm that my mother grew up on has been in the family for five generations. Just this year, grandpa died, so time to give the farm to his son that has worked the land his whole life. If he died next year, the farm might not be in the family any longer.
When my grandparent added land to the farm, it was $270 per acre.
When my uncle (who farms it) added land to the farm, $750 per acre.
Now it is valued at $11,000 per acre. That make the farm "worth" about 5 million, but I put it in quotes because that value only matters if the land were to be sold (not going to be) and at TAX time.

[Z71bill]

Originally Posted by jpa

You're probably right but really? The guy has $2mil to pay the IRS but can't spend a couple grand sitting down with an attorney?

I really don't know the answer -

But it seemed like the gift tax rate was = to the inheritance tax rate.

So if you set the trust up early - before significant asset appreciation - you could come out ahead.


Sad that the laws are so difficult that you need to jump through all the hoops to save taxes.

The only other thing I can think of - is people have a HARD time pulling the trigger and setting up an irrevocable trust. They like to have the control - you never know - maybe the grandson will not turn out like you hoped - and you may want to CUT HIM OFF from your wealth.

Once you set up the trust - you are pretty much locked in.

[jame]

Originally Posted by Z71bill

Once you set up the trust - you are pretty much locked in.

And therein lies part of the problem.

We looked at this pretty hard earlier this year with the accountant and the attorney, and decided against the trust. The big problem with farms, as mentioned earlier is lack of liquidity.

Farmers are dying a lot older these days, and thus, the children inheriting the farm are older as well. Age can play pretty harsh and expensive tricks on us as we age, and having assets tied up in a trust can be a bad deal in a time of individual need. Part of the assets may need to be liquidated to provide needed financial assistance.

Also, if all of the original children outlive the trust, it will generally go to the grandchildren. And there could be many grandchildren, or even great grandkids.

A few generations later, the trust is so diluted, it really doesn't help anyone anymore. Unless one of the kids is really going to farm, it's a better bet to just liquidate if it gets that far, and give someone else a crack at it.

[Big Bird]

Originally Posted by Deanster

Not entirely sure how a family that owns farmland worth $5 million figures they shouldn't be taxed the same way as someone who owns $5m in stocks/bonds.

Whether what you own is a farm, a beach resort, or swampland, stocks, bonds or cash, there's a tax on the value that's handed down, when the total value is in the millions. I don't have a huge problem with this.

This is something that many people DO NOT understand.

Say a family Farm gets valued at 8 million dollars and under the old rules (that will be back in January) the family will owe 35% on $7 mil. or about $2.8 million in cash due 9 months after death. Now I don't know how many businesses or people you work with who own farms or small businesses valued at $8 million but very few of them have $3 mil in cash just sitting around waiting to pay off the government. So what happens is the kid who inherits the farm ends up selling off a big chunk to a developer or some other person and the farm gets sub divided into 5 acre tracts or a subdivision. But the kid now can't make a living on the farm because its now too small so he ends up selling it. Same thing happens to small business owners--they end up selling the business to pay off the IRS. (And you thought Venture Capitalists were the only one's who made a profit by putting people out of business!)...

The Estate Tax is paid on assets that have already been taxed once when you earned them! And have been taxed the whole time if its property from property tax. And now you come along and add insult to injury and feel free to TAKE half of someone else's property to buy stuff you want.

Gee aren't you compassionate!

Look up Joe Robbie and why the family was forced to sell the Miami Dolphins franchise when he died.

The power to tax is the power to destroy! I find it personally disgusting that a fellow citizen thinks its OK to confiscate 50% of a dead man's estate for his own benefit. Or even worse that someone would think it fine to use the power of the government to "get even" with some rich guy who did well. How can any of you covet another man's property like you do and sleep at night? How does taking someone else's life achievement from his heirs make your life better? What business of yours is it if the man wants to pass on his business or property to his children?

[jollygreen]

Originally Posted by Deanster

Not entirely sure how a family that owns farmland worth $5 million figures they shouldn't be taxed the same way as someone who owns $5m in stocks/bonds.

Whether what you own is a farm, a beach resort, or swampland, stocks, bonds or cash, there's a tax on the value that's handed down, when the total value is in the millions. I don't have a huge problem with this.

You're absolutely incorrect. The property/stocks/inheritance has already been taxed. The original owners paid the appropriate taxes when they earned it.

The death tax is an abomination which is tantamount to double taxation.

Eliminating that is about the only thing Bush Jr. did right.

[jollygreen]

Originally Posted by Big Bird

I find it personally disgusting that a fellow citizen thinks its OK to confiscate 50% of a dead man's estate for his own benefit. Or even worse that someone would think it fine to use the power of the government to "get even" with some rich guy who did well.

Dude. This is the new Glock Talk. We've been inundated with commies. They're not citizens. They're comrades.

[certifiedfunds]

Originally Posted by JW1178

Well, what is going to happen is a lot of farms going up for sale with nobody to buy them, so the land value will drop so much, things will be where they once were. I bet Obama's people didn't figure that into the math.

The sad fact is that a 1,000,000 farm doesn't bring in the revenue that makes it worth investing into if you have 1,000,000 to invest. So unless you inherit it, it's hardly worth it.

Obama's estate taxes that he's planning is just going to further hurt the housing market and our economy.

To Obama, it's not about standing tall and reaching high, it's about stooping down and picking up and carrying those who won't stand on their own. We were once reaching for the stars, now we are fishing in the sewers.

Actually, farm land is one of the hottest investments going right now. Soros and Rogers are into it in a big way.