No. of Recommendations: 28
If there is a tax on farmland at death and the land has significantly appreciated, then a portion of the farm, equipment and buildings may have to be sold to pay the tax. I think this would have a tendency to ruin the business.
I'm not sure why you singled out farmland, as this is true about any illiquid asset. Kid inherits a $100 million Picasso or a $50 million mansion or the family's ownership of 5 local pizza shops and is forced to sell to pay the tax? I don't know, I'm not feeling particularly sympathetic.
Consider that the estate tax exemption is $14M, and $28M for a couple that does some rudimentary estate planning. The value of Iowa farmland is ballpark $10K per acre. So roughly speaking, any family farm of less than roughly 2000 acres would be exempt from estate tax, and a larger farm would pay tax only on the excess acreage. I join you in not feeling particularly sympathetic.
Elan
