Indeed! The good news is that there are many steps farmers can take to reduce that tax burden. The exemption is per person, so for a married couple, that limit is effectively doubled. It’s a lifetime limit, so many are making gifts to their heirs this year before the exemption expires to lock in this higher limit. A skilled tax financial/tax advisor can help farmers be strategic by using these tactics, trusts and other legal structures — lots of options, but all require planning ahead.
Well done. Note that even the equitable distribution approach requires detailed planning. For example, will K1 be given the right - per a lease- to lease K2s land at a reasonable rent? If a reasonable rent cannot be agreed upon is there a mechanism to break the deadlock. Will K1 have a right of first refusal on K2s land perhaps with seller financing? There are always details and what ifs to think through and address. You are 100% correct. The plan needs to be reviewed and discussed no less than annually.
That lowered tax threshold is brutal.
Indeed! The good news is that there are many steps farmers can take to reduce that tax burden. The exemption is per person, so for a married couple, that limit is effectively doubled. It’s a lifetime limit, so many are making gifts to their heirs this year before the exemption expires to lock in this higher limit. A skilled tax financial/tax advisor can help farmers be strategic by using these tactics, trusts and other legal structures — lots of options, but all require planning ahead.
Well done. Note that even the equitable distribution approach requires detailed planning. For example, will K1 be given the right - per a lease- to lease K2s land at a reasonable rent? If a reasonable rent cannot be agreed upon is there a mechanism to break the deadlock. Will K1 have a right of first refusal on K2s land perhaps with seller financing? There are always details and what ifs to think through and address. You are 100% correct. The plan needs to be reviewed and discussed no less than annually.
TFD
Thank you! Those are great examples of the complexity - none of this is easy!