Seth wrote: ...
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That's true and unfortunately it's part of the problem w/ farm businesses that they are extremely capital-intensive.
My viewpoint is why compounding the problem even further is seen as good policy by so many (and I don't restrict this only to farm operations but family businesses in general).
Doesn't/couldn't someone who wanted to preserve the farm operation "in the family" start setting aside funds in the later years of the owner's expected life to meet the cash flow necessary to pay the estate tax? This applies to both the owner and the prospective heirs.
In a sense, it (estate tax) is really a cost of doing a family business that should be recognized all along, even if it is paid all at once upon death. After all, the accumulation of wealth that triggers the tax didn't happen all at once. Taxing that accumulation once every generation doesn't sound too frequent to me.
-Mark Bole
Ideally, yes, that would be the way to do so. Unfortunately, in real life things rarely (if ever) are so neat and easy.
Generally even large operations these days have very poor (by investment criteria) ROIs which makes the accumulation of cash often a very difficult issue even if there is a quite large capital investment.
As for the accumulation of wealth argument, again a very large fraction of that is in land values that are simply appreciation and while in theory "wealth", they're not at all liquid and so aren't of much benefit when the time comes.
Also, both cases to which I have previously alluded came w/ deaths at early actuarial ages which made that time frame much shorter than one would have reasonably expected.
I don't know best solution; on a more personal note I had thought we had things reasonably well arranged but circumstances have now unexpectedly changed such that it doesn't appear that the expected scenario might be possible despite having thought we had a plan. 'Tis a quandary and we're not large at all as a operation; no clue how would try to handle it if were.
And, that's in a case where owing to having been independently employed and reasonably successful off the farm before returning after dad's passing that had opportunity to build some other outside equity w/ which to have some flexibility in balancing assets for at least a modicum of fairness; if had only had the farm operation w/ which to have tried to have done that it wouldn't be so.
Again, I just don't see much rationale for the penalties other than punitive for anything under a much larger cap than anybody has spoken of to date.
You're offering anecdotes, I offered data.
Then produce some evidence to back up your contentions.
D.F. Manno wrote: ...
Since I know the individuals I mentioned personally, that's sufficient data for them for me... :)
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I have no authority to provide those individuals' information and wasn't really attempting to do anything here except voice objection/opinion...
But, as noted upthread, a couple of ideas were engendered that I will follow up on w/ local/state FB for their consideration and input to national organization in how to better present the argument.
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