|Washington, D.C., December 17, 2010—“The tax package that President Obama has just signed addresses one of the most onerous issues facing farmers: taxes,” says Jon Scholl, President of American Farmland Trust (AFT). “Land, barns and farm equipment are typically the most valuable assets in farm families.”
Scholl says Congress has successfully addressed the estate tax issue for two-more years. “By exempting the first five million dollars of a farm estate, with a 35 percent tax rate thereafter, the majority of farmers will not face the same pressure to sell their farmland to cover the tax bill.”
“The tax package that Congress passed this week a great start, and in the intervening two years, we hope they will look take another look at legislation that would permanently exempt farms, ranches and forest lands estate taxes as long as the land remains in agriculture,” Scholl adds. “If a family or estate chose to later sell the land out of production, the land would be subject to an estate tax, charged on the value of the land at the time of such a sale. This would be permanent solution that would protect farmland even more effectively.”
In addition estate tax provisions, “the package contains another key mechanism to help protect our nation’s farm and ranch land,” Scholl says. “The final bill contains the tax incentives for donating a conservation easement on agricultural property, allowing conservation easement donors to receive a larger tax deduction over a longer period—fifteen years. This will give thousands of farm families a greater opportunity to protect their land in the 2010 and 2011 tax years.”
The tax deduction is given to landowners who donate a conservation easement on their farm or ranch land, with the enrolled property then permanently limited to agricultural or other compatible uses. Participating farmland remains in private ownership and on the tax rolls. Since its inception in 2006, the tax incentive has been effective in helping thousands of farm families protect their operations from development.
Scholl hopes Congress will take up the estate tax and incentives for donating conservation easements again in the new session, and work toward permanent solutions. “Our nation’s farm and ranchland is not only a critical asset to farm family’s, it is one of our country’s most valuable natural resources,” says Scholl. “We need to permanently extinguish federal taxes that cause farmers and ranchers to stop production and sell their land.”
American Farmland Trust is the nation’s leading conservation organization dedicated to saving America’s farm and ranch land, promoting environmentally sound farming practices and supporting a sustainable future for farms. Since its founding in 1980 by a group of farmers and citizens concerned about the rapid loss of farmland to development, AFT has helped save millions of acres of farmland from development and led the way for the adoption of conservation practices on millions more.
AFT’s national office is located in Washington, DC. Phone: 202-331-7300. For more information, visit www.farmland.org.