If Estate Taxes Tighten, Majority of Land Sells

WASHINGTON, DC – Why does agriculture continue to lobby for permanent repeal of the Estate Tax? According to the American Farm Bureau Federation, the answer is 3,700 acres. In 2010, the national average of farm real estate value was $1,010 per acre and in ten years was more than three times higher at $3,160 per acre. To reach the current estate tax exemption of $11.6 million, a producer would need 3,700 acres of average value land. Put another way, 74,000 family farmers with more than 449 million acres in production and almost 50 percent of all U.S. production could be at risk if nothing changes. Obviously, tighter limits could cause farmers and ranchers to face increased liquidation pressure upon the transfer of assets at death. If the estate tax exemption were reduced to $3.5 million, it would require slightly more than 1,100 acres to reach the exemption level. Based on state-level data, more than 243,000 farms, or 12 percent of operations nationally, would be impacted. These farms operate a total of 667 million acres, suggesting that a $3.5 million estate tax exemption could impact as much as 74 percent of the farmland in the United States.
(SOURCE: All Ag News)