Under current law, there is a $5 million exemption at a 35 percent tax rate for heirs on property left to them from deceased relatives. According to Zack Yanta, Karnes County Farm Bureau president, that number is manageable. What concerns Zack is that at the end of this year, the exemption reverts to $1 million taxed at a 55 percent rate.
“What folks don’t realize is that with input costs, land and equipment, it doesn’t take long to hit the million dollar mark,” he said. “Many lawmakers don’t understand everything it takes to run a successful farming or ranching operation.”
Legislation is in the works now to repeal the estate tax many are calling the “death tax.” U.S. Representative Kevin Brady (R-Texas) sponsored HR 1259, which calls for total repeal of the death tax. Although the bill is gaining ground, Brady says it’s still an uphill battle to get a floor vote on the legislation before the end of the year.
“This legislation needs to move,” Zack said. “Reverting back to the old exemption and tax rate could devastate the ability of future generations to remain on the land and provide food and fiber for all Americans.”