Coalition for Agricultural Estate Tax Reform

Lands Lost
“Our great-grandfather started out
with a 2,000 acre ranch. All we have
“When my grandparents died, we
had to sell one of my family-owned
Did you
left now is 30 acres.”
- Kristen Hukari, Grower
ranches that had been in our family
for more than 25 years. I hope we
know ...
will not have to sell more when my Of all estates, farms
“We struggled to pay the estate tax parents pass on. Our operation is
for 10 years; but had to sell 1/3 of our not large by California standards and are 5-20 times more
property to pay the tax. This property would likely not be a viable business likely to owe the estate
had been in our family since the early if it was smaller.”
20th century and now we’ll never be
tax
- Joey Gonsalves, Rancher
able to regain it.”
- Jerry Haliford, Grower Estimated 2009
“taxable” farm estates
have an average net
Legislative Solution: Too often, when farm and ranch families face the
worth of $7 million
estate tax settlement the family has no other choice but to sell off a part
or all of the operation. The financial decisions must be made in short Of the $7 million, 85%
order even as the family deals with the loss of a family member. H.R. of the value is farm
3524 would allow the heirs to maintain the family farming operation. business assets,
primarily farm real
“When my father passed on, I had to refinance estate
the ranch for thirty years to pay the tax burden.”
- George Fontes, Grower Estate tax is generally
required to be paid
“It is unrealistic to believe that the within 9 months
estate tax is a tax only on the rich … Farm equity has more
assets of ranching and farming than doubled -
families are tied to the property they primarily due to
own and the product they produce.” increased value of farm
- Janice Tosten, Rancher real estate - value that
does nothing for
Hardships Revisited agricultural
“We’re fourth generation cattle ranchers. Our land has had estate
taxes paid on it four times. Is that fair? It’s hard enough to stay in
production.
business with government regulations, without having to pay the
IRS every generation.” 1 in 10 farm estates
- Shirley Murrer, Rancher would owe the tax in
2011
Legislative Solution: The biggest blow is when farm families are forced
Compiled from “Federal Tax Policies
to re-live estate tax problems in future generations. H.R. 3524 will and Farm Households” by USDA’s ERS
Division
create greater certainty and continuity from one generation to the next.
 Coalition for Agricultural Estate Tax Reform

Production Practices Changed

“With the weight of the IRS on our
shoulders, my sister and I made a
“After the untimely death of my
Grandfather; our family had to inter-
Did you
tough decision. We harvested thou- rupt a sustainable timber harvest plan.
sands of trees that we didn’t plan on We were forced to quadruple our rate know ...
harvesting. 13,157 trees were cut – far of harvest to meet the demands of the
more than we would have conceived IRS.”
The United States loses 2
of harvesting under other circum- - Jack Russ million acres of land each
stances.” Timber and Cattle Operator year due to urbanization
- Hannah Tangeman-Cheney, and sprawl.
Timber and Cattle Operator
While the estate tax may
Legislative Solution: Estate tax settlements change operating affect only a small
procedures to the detriment of the business and the environment, percentage of farmers &
particulary in the case of timberland ownership or livestock ranchers; it affects a large
operations. H.R. 3524 would make such actions unnecessary. percentage of farm &
ranch land.
“Four years ago one of our orchards was valued at Those farmers who are 55
$12,000 an acre. Today it would be valued at more than and older make up close
$30,000 per acre. It’s hard enough for the next generation to 58% of owners and
to successfully farm, the estate tax makes it nearly control almost 64% of
impossible.” (2006) American farmland.
- Janie Gazman, Farmer and Rural Appraiser Compiled from Environmental Defense
Fund publications.

Capital Diverted
“My husband and I have spent more than $250,000 on estate tax Legislative Solution: Farm
planning – money that would have been better spent in expanding the
business instead of giving to lawyers and insurance companies.”
families facing estate tax conse-
- Janet Kister, Nursery Owner quences are forced to spend ten
of thousands annually to avoid
“Our farming operation suffered after paying estate taxes more than 10 the problems, purchasing huge
years ago. We did not have the necessary capital to upgrade
equipment and replenish lost trees.”
life insurance policies or engag-
- Deborah Hunter, Grower ing in costly estate planning
and restructuring; expenditures
“My Dad worked long and hard hours, to build this farm, only to leave that are made at the expense of
us with a huge estate tax debt. We ended up paying $1,380,000 in
taxes. We are being penalized for all of my Dad’s hard work, which we investing in the business itself.
have been struggling to pay each year since.” H.R. 3524 would eliminate or
- Judy Botelo, Grower greatly reduce such outlays.