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Inheritance tax on Farmland ?
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buford
Posted 11/8/2012 02:07 (#2685286 - in reply to #2684871)
Subject: RE: Inheritance tax on Farmland ?


Gusmz,
there isn't all the information in your initial post(mostly your grandfathers arrangements) to answer your question, but I can give you some idea on what I hope was done
prior or should have been done. This is my understanding and not necessarily correct and I would by all means as someone above suggested, go to an estate attorney and get the
answers. I can help you with a couple things to look out for.

1) what should have been done (and I hope was) is that an ABC Revocable Living Trust was set up by your grandparents. Note the ABC and not AB. Most of todays farming operations require
an ABC trust because of the value. If, when you are talking to an Estate Attorney and they give you a funny look about the ABC part and start talking about just AB get up and walk away as
quickly as possible.

2) What the ABC does for you is this: when a couple sets up a trust they get 2 federal exemptions (as opposed to just one exemption without the trust). When the first one passes you have
an appraisal done (be sure the appraiser is qualified, as in usually not the local auctioneer, even though they know the value). With that appraisal you are then able to put the amount of acres
or whatever assets into the "B" part of the trust UP TO the Federal Exemption, whatever that may be for that calendar year. Think of the "B" part as Below Ground. Now you have the other spouse that
is Above Ground (the "A" part). When the second spouse passes away you can get another appraisal and put however many dollars of assets in the "A" part of the Trust UP TO the Exemption
is for that year. Then whatever is left over (if any) is moved to the "C" part of the trust and that is what you have to pay the tax on. So, for example lets say that an estate is worth 5 million dollars.
If the first one passes and the Exemption for that year is 2 million and the second one passes and the exemption for that year is 2.5 million, the difference of 500,000 is what you would pay the Estate Tax on.

3) If your grandparents did not have a Revocable Living Trust at all, it is my understanding that there will only be one exemption.

4) I am not an attorney and my understanding of how this works may be all wrong.

5) I am sure that rupert will take all of this out of context like he did "Im the Boss" last night and tear me a new one. Holy Balls, I was laying on the floor laughing! What a hoot!

Good Luck on keeping the farm. Yesterdays election was a step in the wrong direction for being able to keep land in the family. Buford




Edited by buford 11/8/2012 02:11
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