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Preserving Family Farms Act allows property to be appraised as farmland rather than development land when determining estate taxes.

November 22, 2019

1 Min Read

 

Reps. Jimmy Panetta, D-California, and Jackie Walorski, R-Indiana, have introduced The Preserving Family Farms Act of 2019 to modernize the special use valuation provision of the estate tax.

The special use valuation provision, known as Section 2032A, allows property to be appraised as farmland rather than its development value when determining estate taxes. Increasing the amount of farmland or ranchland that can be valued at agriculture value rather than development value would help protect family-owned businesses.

"Farm and ranch families often face a significant financial burden when they have to pay estate taxes," said American Farm Bureau Federation President Zippy Duvall. "Farm families should be able to pay based on how their land is actually used, rather than its potential value as commercial property."

In the Tax Reform Act of 1976, Congress recognized the disproportionate burden of the estate tax on agricultural producers and created Section 2032A as a way to help farmers keep their farms. However, the benefits of Section 2032A have been stymied over the years as the cap on deductions has failed to keep pace with the rising value of farmland. The Preserving Family Farms Act of 2019 increases the maximum amount allowed under the exemption from $750,000 to $11 million (indexed for inflation.

“America’s beef producers should never be forced to sell any of their family’s farm, ranch or business due to a death of a family member,” said National Cattlemen's Beef Association President President Jennifer Houston.

Source: National Cattlemen's Beef Board, American Farm Bureau Federation, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset. 

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