Coalition for Agricultural Estate Tax Reform

H.R. 3524: A Solution for Agriculture

Exclusion of family farm assets from the estate tax would benefit the American public by providing
greater food security, important open space and environmental assets while helping to preserve a
valued lifestyle.
UÊ Farmers and Ranchers support an exclusion of farm assets as long as the estate continues as a family
farming operation in addition to the highest estate tax exemption level possible.
UÊ Surviving family members often are forced to make tough decisions on whether to remortgage the
operation or sell a portion or all of the farm to settle the estate tax. Reforming estate tax policy will
keep farms and future generations in agriculture.

UÊ Unlike most other estates, farm and ranch family assets consist almost entirely of investment in
land, buildings, livestock and production tools such as specialized equipment, irrigation systems and
processing units. As a result, there are few saleable assets and very little liquidity available to pay
estate taxes.
UÊ To remain economically viable, many agricultural operations have diversified through the devel-
opment of associated production units such as storage and packing sheds, drying, hulling or wine
crushing operations. Such diversification requires capital formation and each function is integral to
the viability of the operation, parceling-off or selling part of the estate is not a practical option.
UÊ Farm estates are 5 to 20 times more likely to incur estate taxes than other estates. It is estimated
that 10 percent of the farm estates (farms with sales of $250,000 or more annually) are likely to owe
estate taxes in 2009, according to the USDA Economic Research Service.
UÊ Farm and ranching operations in the path of urban development face even greater estate tax hurdles
due to sharply higher appraisal values (the basis of estate tax valuations) that render many farms no
longer economically viable.

UÊ Money presently spent on insurance and other preventive actions is revenue that could be devoted
to capital improvements or conservation efforts that would improve the operation and the surround-
ing environment.

UÊ Multi-generational family farmers and ranchers have a demonstrated love of the land with a strong
sense of stewardship and conservation ethic.

Cosponsor H.R. 3524 on behalf of the nation’s farmers and ranchers

and support additional tax relief for agricultural operations in tax
extender legislation.