Congress is about to go home without taking action on a Farm Bill or many other issues, including the estate tax issue. This means a window of opportunity for farm families is about to close. The middle of a drought may not seen like the best time to think about estate planning, but Pat Early with Somerset CPAs says the clock is ticking for many farm families, “Right now, there is a $5 million per person exemption which means a couple can pass on up to $10 million in assets without any tax penalty.” While that might seem like a big number, with land prices at record levels, even modest size farms may be close to that level.
Early says, however, that exemption is scheduled to end in just a few short months, “The $5 million per person exemption will end at the end of this year, so there is a limited amount of time to take advantage of this higher exemption.” While it is possible that Congress could extend the higher exemption, it is also just as likely they could do nothing in which case the level would return to $1 million. Early says now is the time that families should be having a discussion about the long term plans for the family farm.