02-08-2012, 12:28 PM
A family farm isn't going to generate enough cash to pay that bill, even if it is 'only' 35% over the exemption (though it resets to 55%, with only a $1 million exemption as of next January)
So, the farm gets sold, usually to a developer, whether or not the family wants to do so.
For a small business, they might be able to borrow enough to pay the bill (normally due within 6 months), but the cash to service that loan has to come from somewhere.
And since payroll remains the largest variable cost for most business, reductions in that category are what will pay for the loan.
The above is the reality of the estate tax as it currently exists - it is charged on ALL assets, not just cash or other liquid assets.
We might agree that an operating farm or business should be treated differently than cash in the bank, but that is currently not the case.
So, the farm gets sold, usually to a developer, whether or not the family wants to do so.
For a small business, they might be able to borrow enough to pay the bill (normally due within 6 months), but the cash to service that loan has to come from somewhere.
And since payroll remains the largest variable cost for most business, reductions in that category are what will pay for the loan.
The above is the reality of the estate tax as it currently exists - it is charged on ALL assets, not just cash or other liquid assets.
We might agree that an operating farm or business should be treated differently than cash in the bank, but that is currently not the case.