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bucheon bum
Joined: 16 Jan 2003
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 Posted: Sat Apr 11, 2015 6:18 am Post subject: |
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| Plain Meaning wrote: |
| geldedgoat wrote: |
Hmmm, I hadn't heard of that. Do you know how often the easement and the associated tax benefits are granted? It appears to not be automatic, with the estate value dependent upon providing some public benefit.
Still, this seems like a needless complication. What is the potential downside of simply deferring the tax until the development value of the land is realized via a sell? |
I do not know the details of how the easement works, which will depend partly on state law. I just know about it because my property law professor was very green and thought this was more important than the rule against perpetuities (he was not wrong).
The basic arrangement seems to be this: the easement is a declaration that the land cannot be used for anything beyond the purpose stated. So let's say its agriculture. This burdens the land, as it cannot be used for other development. So, if the heir truly wants to continue the family farm, the easement is placed which restricts the use of the land to agriculture, maybe there are different easements for different uses (grazing, hunting, etc), or maybe one easement which allows flexibility between agriculture, grazing, and hunting.
Any appraisal will factor the restriction of the easement, and in most cases it will lower the value of the land (but perhaps not in all cases; for example, an easement for grape cultivation in Napa Valley).
The conservation easement is just one estate planning strategy, particular to estates which contain large plots of land.
A conservation easement should also lower land tax rates. |
My mom lives in a rural area 1-2 hours away from Napa. There is a local foundation or non-profit that basically serves as a collective easement. When my mom passes away, her property will basically be donated to the non-profit. From that point forward, nothing will be allowed to be constructed on the property. I'm not sure what the situation would be if the property had vineyards on it or had some other farming purpose.
My parents, when setting up their will, were initially frustrated since they wanted to keep their property in its current natural state. I think its relatively small size limited their options, but the aforementioned non-profit was apparently the best solution. |
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EZE
Joined: 05 May 2012
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| Posted: Sat Apr 11, 2015 9:44 am Post subject: |
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| Plain Meaning wrote: |
| Yes, Congress has buffered the family farm from estate taxes. You've provided no evidence to the contrary. The stuff about family farms disappearing, that's another matter from the subject of my statement. |
When you're from the city and you're looking at it from an academic perspective, it probably sounds like a good deal. But look at it from a farmer's perspective. Even if the estate taxes are reduced the maximum amount of $628,000 and go from $2,628,000 down to $2,000,0000, think about how many head of cattle or how many bushel baskets of turnips it would take to even gross $2,000,000, let alone see $2,000,000 in profit.
The conservation easement is especially a raw deal and a Trojan Horse. You're giving over your property rights to someone else, which totally defeats the purpose of being a landowner. The landowner becomes subservient to the trust. You still have to pay the property taxes, but you're essentially a serf, or a custodian at best. The trust decides how the land is utilized, which crops can be grown, which fertilizers can be used, and so on. The best you can hope for is to ask for permission like a two year old and, with luck, be told yes. The landowner is no longer in control over production or expenses, but has to live with the financial repercussions. The trust isn't going to worry about how high the expenses are since the landowner is the fool paying the bill.
I'll definitely be selling the family farm and maybe even the house. I would have to pay my entire life savings plus borrow a seven figure sum just to pay the estate taxes even with a $628,000 tax break. There's no way I could get that kind of loan, not that I would ever even consider going into that kind of debt, or hand over my life savings to the IRS. I'm sure I'll just sell out, pay the taxes, and move on just like so many others have done. |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Sat Apr 11, 2015 2:06 pm Post subject: |
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| NovaKart wrote: |
| Steelrails wrote: |
Left-wing media is bad these days as Salon has become borderline unreadable and Slate is good for anything but the news (Emily Yoffe is really really good), but right-wing sites are just nuts with some of the crap they say. |
I hate-read salon.com Sometimes it reads like a parody of academic ultra-liberal thought. Brittney Cooper is especially insane. Her article about how a "racist" white man moved her stuff while she could sit down on the train was a highlight. Mary Elizabeth Williams thinks it's a draconian dress code when girls aren't allowed to wear just leggings or just a sports bra in PE. Then there was that insane "I can't stand white bellydancers" article. That one really was over the top and even salon readers were almost unanimous in condemning it.
I think slate.com is a lot better and sometimes they have really good in-depth articles and Emily Yoffe is one of the better writers. There are some extremists like Amanda Marcotte but I find Hanna Rosin can be more nuanced even though she wrote that awful "End of Men" book.
Another thing that's irritating about salon, someone gets on their **** list and they have like half a dozen articles about him (it's almost always a male) in a day. Like Bill Cosy, Woody Allen, frat boys, the NFL. Those are the 4 in the axis of evil on salon. I totally get the Bill Cosby thing but they don't need an article every time he speaks. |
Yeah, Salon articles sometimes pop up as suggested reading on my phone. The headlines make me groan, but I occasionally click on the links just to see if the articles are as bad as the headlines suggest. Every time so far- yep, they most definitely are. |
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Steelrails
Joined: 12 Mar 2009
Location: Earth, Solar System
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| Posted: Sat Apr 11, 2015 8:03 pm Post subject: |
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| Yeah, Brittney Cooper is awful. Andrew O'Hehir is fine for his film reviews, but he bats at around the Mendoza line for his political articles. The only consistently good writer is Tracy Clark-Flory. After she endured watching the Randy Quaid porno to write an article about it, I realized she's like the janitor that cleans up a burst toilet- Not getting paid enough. |
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Plain Meaning
Joined: 18 Oct 2014
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| Posted: Sat Apr 11, 2015 11:29 pm Post subject: |
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| EZE wrote: |
| Plain Meaning wrote: |
| Yes, Congress has buffered the family farm from estate taxes. You've provided no evidence to the contrary. The stuff about family farms disappearing, that's another matter from the subject of my statement. |
When you're from the city and you're looking at it from an academic perspective, it probably sounds like a good deal. But look at it from a farmer's perspective. Even if the estate taxes are reduced the maximum amount of $628,000 and go from $2,628,000 down to $2,000,0000, think about how many head of cattle or how many bushel baskets of turnips it would take to even gross $2,000,000, let alone see $2,000,000 in profit.
The conservation easement is especially a raw deal and a Trojan Horse. You're giving over your property rights to someone else, which totally defeats the purpose of being a landowner. The landowner becomes subservient to the trust. You still have to pay the property taxes, but you're essentially a serf, or a custodian at best. The trust decides how the land is utilized, which crops can be grown, which fertilizers can be used, and so on. The best you can hope for is to ask for permission like a two year old and, with luck, be told yes. The landowner is no longer in control over production or expenses, but has to live with the financial repercussions. The trust isn't going to worry about how high the expenses are since the landowner is the fool paying the bill.
I'll definitely be selling the family farm and maybe even the house. I would have to pay my entire life savings plus borrow a seven figure sum just to pay the estate taxes even with a $628,000 tax break. There's no way I could get that kind of loan, not that I would ever even consider going into that kind of debt, or hand over my life savings to the IRS. I'm sure I'll just sell out, pay the taxes, and move on just like so many others have done. |
I simply have no sympathy for you. Go see an estate and trust planning attorney. I am sure one can help save a dramatic amount of estate taxes, particularly if your parents/whoever plan ahead. |
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EZE
Joined: 05 May 2012
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| Posted: Sun Apr 12, 2015 8:15 pm Post subject: |
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| Plain Meaning wrote: |
| I simply have no sympathy for you. Go see an estate and trust planning attorney. I am sure one can help save a dramatic amount of estate taxes, particularly if your parents/whoever plan ahead. |
Of course not. It's an alien concept for you, something you only read about. But I won't need sympathy. When I sell the family farm, my net worth will be going up, so I'll be okay. It's the USA that will become poorer, especially after the tax revenues are inevitably squandered on our food stamp society and our gazillion dollar military.
According to your own cut and paste, the maximum amount of estate taxes that can be saved is $628,000, and that's if the landowner wants to pay property taxes without having property rights.
Farms in the USA are increasingly becoming foreign owned and my family's is going to become one of them. I have less than $400,000 and the estate taxes will be in the millions no matter what. There's no amount of estate planning that make it avoidable. It's mathematically impossible to not lose at least a fraction of the farm, but I'll most likely sell it in full after harvesting the timber. |
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Steelrails
Joined: 12 Mar 2009
Location: Earth, Solar System
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| Posted: Sun Apr 12, 2015 11:21 pm Post subject: |
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| EZE wrote: |
| Plain Meaning wrote: |
| I simply have no sympathy for you. Go see an estate and trust planning attorney. I am sure one can help save a dramatic amount of estate taxes, particularly if your parents/whoever plan ahead. |
Of course not. It's an alien concept for you, something you only read about. But I won't need sympathy. When I sell the family farm, my net worth will be going up, so I'll be okay. It's the USA that will become poorer, especially after the tax revenues are inevitably squandered on our food stamp society and our gazillion dollar military.
According to your own cut and paste, the maximum amount of estate taxes that can be saved is $628,000, and that's if the landowner wants to pay property taxes without having property rights.
Farms in the USA are increasingly becoming foreign owned and my family's is going to become one of them. I have less than $400,000 and the estate taxes will be in the millions no matter what. There's no amount of estate planning that make it avoidable. It's mathematically impossible to not lose at least a fraction of the farm, but I'll most likely sell it in full after harvesting the timber. |
But EZE, that money should go into the government money vacuum to pay for bloated defense projects and thrown at failing schools, with Chinese conglomerates taking over your family's farm. If you don't agree you're supporting the 1% and their inherited wealth. That farm isn't your family's l, it's the government's.
After all, you lived a life of privilege by pitchforking compost into a wheelbarrow in November and riding machinery hoping you don't hit a woodchuck hole and end up maiming yourself. |
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Plain Meaning
Joined: 18 Oct 2014
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| Posted: Mon Apr 13, 2015 12:14 am Post subject: |
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| Steelrails wrote: |
| EZE wrote: |
| Plain Meaning wrote: |
| I simply have no sympathy for you. Go see an estate and trust planning attorney. I am sure one can help save a dramatic amount of estate taxes, particularly if your parents/whoever plan ahead. |
Of course not. It's an alien concept for you, something you only read about. But I won't need sympathy. When I sell the family farm, my net worth will be going up, so I'll be okay. It's the USA that will become poorer, especially after the tax revenues are inevitably squandered on our food stamp society and our gazillion dollar military.
According to your own cut and paste, the maximum amount of estate taxes that can be saved is $628,000, and that's if the landowner wants to pay property taxes without having property rights.
Farms in the USA are increasingly becoming foreign owned and my family's is going to become one of them. I have less than $400,000 and the estate taxes will be in the millions no matter what. There's no amount of estate planning that make it avoidable. It's mathematically impossible to not lose at least a fraction of the farm, but I'll most likely sell it in full after harvesting the timber. |
But EZE, that money should go into the government money vacuum to pay for bloated defense projects and thrown at failing schools, with Chinese conglomerates taking over your family's farm. If you don't agree you're supporting the 1% and their inherited wealth. That farm isn't your family's l, it's the government's.
After all, you lived a life of privilege by pitchforking compost into a wheelbarrow in November and riding machinery hoping you don't hit a woodchuck hole and end up maiming yourself. |
That was a good troll, Steelrails.
The 1% wrenched control of this country through tax reductions, including a massive roll-back of the estate tax.
Meanwhile, none of you have substantiated your claims that the estate tax has anything substantial to do with family farms (nice Yellow Peril baiting there with Chinese congolomos, btw, I'll remember that the next time you complain about Koreans getting a bad rap on this board), particularly since only about 160 of many thousands of "family" farms are impacted.
Last edited by Plain Meaning on Mon Apr 13, 2015 12:15 am; edited 1 time in total |
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wooden nickels
Joined: 23 May 2010
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| Posted: Mon Apr 13, 2015 12:15 am Post subject: |
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| Plain Meaning wrote: |
| EZE wrote: |
| Plain Meaning wrote: |
| Yes, Congress has buffered the family farm from estate taxes. You've provided no evidence to the contrary. The stuff about family farms disappearing, that's another matter from the subject of my statement. |
When you're from the city and you're looking at it from an academic perspective, it probably sounds like a good deal. But look at it from a farmer's perspective. Even if the estate taxes are reduced the maximum amount of $628,000 and go from $2,628,000 down to $2,000,0000, think about how many head of cattle or how many bushel baskets of turnips it would take to even gross $2,000,000, let alone see $2,000,000 in profit.
The conservation easement is especially a raw deal and a Trojan Horse. You're giving over your property rights to someone else, which totally defeats the purpose of being a landowner. The landowner becomes subservient to the trust. You still have to pay the property taxes, but you're essentially a serf, or a custodian at best. The trust decides how the land is utilized, which crops can be grown, which fertilizers can be used, and so on. The best you can hope for is to ask for permission like a two year old and, with luck, be told yes. The landowner is no longer in control over production or expenses, but has to live with the financial repercussions. The trust isn't going to worry about how high the expenses are since the landowner is the fool paying the bill.
I'll definitely be selling the family farm and maybe even the house. I would have to pay my entire life savings plus borrow a seven figure sum just to pay the estate taxes even with a $628,000 tax break. There's no way I could get that kind of loan, not that I would ever even consider going into that kind of debt, or hand over my life savings to the IRS. I'm sure I'll just sell out, pay the taxes, and move on just like so many others have done. |
I simply have no sympathy for you. Go see an estate and trust planning attorney. I am sure one can help save a dramatic amount of estate taxes, particularly if your parents/whoever plan ahead. |
Geez |
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Plain Meaning
Joined: 18 Oct 2014
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| Posted: Mon Apr 13, 2015 12:24 am Post subject: |
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| wooden nickels wrote: |
| Plain Meaning wrote: |
| EZE wrote: |
| Plain Meaning wrote: |
| Yes, Congress has buffered the family farm from estate taxes. You've provided no evidence to the contrary. The stuff about family farms disappearing, that's another matter from the subject of my statement. |
When you're from the city and you're looking at it from an academic perspective, it probably sounds like a good deal. But look at it from a farmer's perspective. Even if the estate taxes are reduced the maximum amount of $628,000 and go from $2,628,000 down to $2,000,0000, think about how many head of cattle or how many bushel baskets of turnips it would take to even gross $2,000,000, let alone see $2,000,000 in profit.
The conservation easement is especially a raw deal and a Trojan Horse. You're giving over your property rights to someone else, which totally defeats the purpose of being a landowner. The landowner becomes subservient to the trust. You still have to pay the property taxes, but you're essentially a serf, or a custodian at best. The trust decides how the land is utilized, which crops can be grown, which fertilizers can be used, and so on. The best you can hope for is to ask for permission like a two year old and, with luck, be told yes. The landowner is no longer in control over production or expenses, but has to live with the financial repercussions. The trust isn't going to worry about how high the expenses are since the landowner is the fool paying the bill.
I'll definitely be selling the family farm and maybe even the house. I would have to pay my entire life savings plus borrow a seven figure sum just to pay the estate taxes even with a $628,000 tax break. There's no way I could get that kind of loan, not that I would ever even consider going into that kind of debt, or hand over my life savings to the IRS. I'm sure I'll just sell out, pay the taxes, and move on just like so many others have done. |
I simply have no sympathy for you. Go see an estate and trust planning attorney. I am sure one can help save a dramatic amount of estate taxes, particularly if your parents/whoever plan ahead. |
Geez |
He's selling his family farm because he can't cut running one. Or a dozen other reasons. The ebil gubmint is just an excuse.
Or maybe he's just trolling and doesn't even stand to inherit a family farm.
https://storify.com/bengoldacre/why-inheritance-tax-is-equitable-moral-and-sensibl
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1. We’ve lived through an era of appalling growth in income and asset inequality. Locking that in for a 2nd generation is very bad news.
2. Growth in house value is generously excluded from capital gains because you need to live in it. When you’re dead, that excuse is gone.
3. Housing wealth derives from the value of the land, which rises because of the actions of everyone in the country, not you.
4. Caring for the old is very costly. The old didn’t foresee this, and didn’t pay tax to fund it. Housing wealth will do nicely.
5. A country where you get ahead best by luck and inheritance, rather than hard work, is a lazy unfair country that will fail.
6. I totally get the primordial desire to do your best for your kids, but if your plan is to do that with banknotes, you’re doing it wrong.
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Look. The vast vast majority of estate taxes will be collected from genuinely large estates. The estate tax destroying the family farm is a largely myth, as I've attempted to show with data above. Meanwhile, wealth inequality is anything but a myth: the 85 richest people have more wealth than 3.5 billion people. To the extent that they've "earned it," well ... but insofar as they've inherited it, yes, part of it can and should be distributed to public purpose. |
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Steelrails
Joined: 12 Mar 2009
Location: Earth, Solar System
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| Posted: Mon Apr 13, 2015 4:43 pm Post subject: |
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Many of the arguments for the estate tax seem to have a slight tinge of envy and resentment. Now, at times people make rational arguments for the estate tax. The argument about the costs of elderly care and the estate tax being a reasonable target for this as its usually the elderly that pass on an estate being one. That actually is a fair point that I'd be willing to see like a 5-10% estate tax on or something.
The thing is that the estate tax may also hit small business owners who may have assets in terms of their store and the equipment inside, but generate an income that is only moderately well-off. Taking any reserves from their account could severely affect their ability to secure loans and command credit that they need to make orders and conduct business. $8 million dollars may sound like a lot, but for a small firm, its not that much. Seeing 30% of that, which would likely come exclusively from cash, would be a stiff blow.
And no yellow peril here, just threw out China as they seem to be doing a lot of the buying these days. If you ask me to, I'll change it to "foreign" companies or even Big Agra if "foreign" is too jingoistic. |
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Leon
Joined: 31 May 2010
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| Posted: Mon Apr 13, 2015 5:14 pm Post subject: |
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| Steelrails wrote: |
Many of the arguments for the estate tax seem to have a slight tinge of envy and resentment. Now, at times people make rational arguments for the estate tax. The argument about the costs of elderly care and the estate tax being a reasonable target for this as its usually the elderly that pass on an estate being one. That actually is a fair point that I'd be willing to see like a 5-10% estate tax on or something.
The thing is that the estate tax may also hit small business owners who may have assets in terms of their store and the equipment inside, but generate an income that is only moderately well-off. Taking any reserves from their account could severely affect their ability to secure loans and command credit that they need to make orders and conduct business. $8 million dollars may sound like a lot, but for a small firm, its not that much. Seeing 30% of that, which would likely come exclusively from cash, would be a stiff blow.
And no yellow peril here, just threw out China as they seem to be doing a lot of the buying these days. If you ask me to, I'll change it to "foreign" companies or even Big Agra if "foreign" is too jingoistic. |
There are ways to structure business so the estate tax would not do what you are saying, such as an LLC (I think, based on my limited understanding of this). As for the family farms, I would just say that many only survive because of government subsidies anyways, so the gov. giveth and the gov. taketh away. If I were to be a hard headed realist about this I would say that they are inefficient anyways (I have family who own a farm, I would like them to keep it because it makes them happy, so that last sentence is more devils advocate than true position.) |
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actionjackson
Joined: 30 Dec 2007
Location: Any place I'm at
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| Posted: Mon Apr 13, 2015 5:37 pm Post subject: |
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| Quote: |
Professor Neil Harl, an Iowa State University economist whose tax advice has made him well known among Midwest farmers, said for 35 years he searched without finding one family farm lost to the estate tax.
“It’s a myth,” he said. |
| Quote: |
In 2013 just 660 taxable estates included any farm assets, the latest IRS report shows. The average value of those farm assets was $2.8 million, well below the current exemption from the estate tax of $5.2 million ($10.4 million for a married couple).
Congress grants extra exemptions for working farms and for small businesses (a twofer for farmers, since a farm is also a business). Congress also allows big discounts for minority interests in land given to heirs during a farmer’s life. Then there are blockage discounts because as long as Mom or Dad is alive, the children cannot sell the land, further reducing the value for estate tax purposes.
The estate tax rules are so lax that a farmer with two or more children who starts arranging an orderly transfer of assets a decade or two before dying can pass on tens of millions of dollars for less than the cost of a new subcompact car while retaining ironclad control of the operation until death. |
| Quote: |
| Nationwide, only 20 farms a year pay estate taxes, the Tax Policy Center estimated. That’s less than 1 in 100,000 farms. That estimate is limited to estates in which the farm represented more than half the wealth, thereby excluding gentleman farmers like Malone and Turner. |
http://america.aljazeera.com/opinions/2015/3/the-estate-tax-isnt-destroying-family-farms.html |
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Plain Meaning
Joined: 18 Oct 2014
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| Posted: Thu Apr 16, 2015 6:37 pm Post subject: |
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http://crfb.org/document/crfb-estate-tax-bill-would-add-debt
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CRFB: Estate Tax Bill Would Add to the Debt
April 16, 2015
The House passed legislation today to repeal the estate tax without offsetting revenue or spending, costing $269 billion over ten years. It also passed a bill to make the state and local sales tax deduction permanent, at a cost of $42 billion over ten years.
Maya MacGuineas, president of the Committee for a Responsible Budget, said the following:
“With record-high national debt levels currently at $13 trillion and growing, it's hard to make the case that adding further to the debt is a good idea. This failure to pay for this legislation is completely at odds with rhetoric about fiscal responsibility and balanced budgets.
“Between the $140 billon SGR ‘doc fix’ Congress just passed, and the $310 billion cost of these bills, there is clearly a disturbing trend.
“Not only would these bills add to the debt, they conflict with the recently passed House budget resolution, which balances the budget in the next decade. If these bills pass, the budget would no longer balance – the $33 billion surplus in 2025 would instead be a $20 billion deficit. It is impossible to take a budget resolution seriously if lawmakers pass a balanced budget and then bust that budget plan before it is even finalized.
“Bringing our debt under control will require tough choices and changes to all parts of the budget, including entitlement reforms, spending constraints, and new revenues. If Congress is unwilling to make these needed changes at this time, the very least it should do is agree not to make the debt worse." |
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atwood
Joined: 26 Dec 2009
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| Posted: Thu Apr 16, 2015 7:16 pm Post subject: |
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| Steelrails wrote: |
I hate that capital gains tax on income under $50,000 and the estate tax. Let young investors get their feet wet and be able to also look into short-term investing. And when you die, that should go to your family (or whomever you care to designate), not the government.
Snowden should return to the US face trial, be convicted, and given a softball sentence. He was right, but he was wrong, and you don't run to another country if you are a real whistleblower. Bradley Manning deserves what he got, and should go to a men's prison and not get a dime for any sex change operation. Bode Berghdal? Meh. You gotta get him back, its just what you do. If for no other reason than to find out what he knows. Give him a year or two in Leavenworth and then let him live in Colorado or whatever and grow dope.
People who think the RFRA is an easy call one way or the other are dumb and can't see past their narrow agenda. No one on the left would mind if someone used the RFRA to do a Native American peyote ritual, and no one on the right would support it if it let some Wiccan use some wack religious exemption to cast spells on day care kids or some crap like that.
Left-wing media is bad these days as Salon has become borderline unreadable and Slate is good for anything but the news (Emily Yoffe is really really good), but right-wing sites are just nuts with some of the crap they say.
Can everyone around the world just admit that they would think it would be totally badass if Putin was their president? Sure you'd have a few less freedoms, but you'd have the most feared man in the world backing you up. |
Disagree on the taxes. By the way there's no capital gains tax on income. You don't seem to understand the estate tax either.
Snowden is a traitor, pure and simple. If he wants to come back, then let him face the music. |
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