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==children are forced to sell the land after parents die due to tax obligations== Do you have a source for this? If true, wouldn't they just sell a portion of

==children are forced to sell the land after parents die due to tax obligations== Do you have a source for this? If true, wouldn't they just sell a portion of the land to cover the tax, as it only kicks in over $5.5 million?

GlenTheMachine 8y ago
I'm in this situation -- when my mom passes, me and my brothers will inherit the family farm of 320 acres in central VA. As far as I can tell there's no inheritance tax involved. Just in case, decades ago my dad put the land in a family partnership of which me and my siblings each own 19%. So even if inheritance tax was a thing for family farms, there are ways around it. We'll have to pay property tax on it, but that's around $3000 per year.
- Wowfunhappy 8y ago
  > Just in case, decades ago my dad put the land in a family partnership of which me and my siblings each own 19%. Is it that easy to bypass the estate tax? I'm surprised it collects basically any money at all, if all you have to do is make your children "co-owners" before you die.
dbg31415 8y ago
My family ranch was in North Dakota. Most ranches and farms are set up so that there isn't much value if you don't sell the whole thing. You need land, the homestead (house, barn, shop, corals...), a water source (ideally multiple), roads in and out, fences carved the right way... Yes, you could likely sell a portion of the property, but the parts aren't worth the same as the whole. You'd likely eat the cost of adding in new windmills, water storage tanks, and developing the land in order to get it to sell if you were to carve out a part of your existing pastures and put it on the market. We basically ended up carving off the farm land and selling that, but we had to pay to put a road in... and fences on either side of the road, cattle guards, and it ended up costing $100k in materials and labor (since we had to hire people to do it given nobody lived out there any more)... all just to make $300k. TL;DR: Ranches are set up to be units, and while you can sell part of the land, it sucks to do so.
dbcurtis 8y ago
It absolutely was a thing in the 1970’s. I saw neighbor’s farms destroyed by the inheritance tax. The law was changed, so now the inheritance tax kicks in at a much higher level. Most farmers set up trusts now anyway. It wasn’t only farmers that got clobbered by the inheritance tax. The children of the local shoe store owner were in the same inheritance tax hell.
- Latteland 8y ago
  Was this in the 70s or more recent? I can't imagine a shoe store that costs more than $5 million.

GlenTheMachine 8y ago

I'm in this situation -- when my mom passes, me and my brothers will inherit the family farm of 320 acres in central VA. As far as I can tell there's no inheritance tax involved. Just in case, decades ago my dad put the land in a family partnership of which me and my siblings each own 19%. So even if inheritance tax was a thing for family farms, there are ways around it. We'll have to pay property tax on it, but that's around $3000 per year.

Wowfunhappy 8y ago
> Just in case, decades ago my dad put the land in a family partnership of which me and my siblings each own 19%. Is it that easy to bypass the estate tax? I'm surprised it collects basically any money at all, if all you have to do is make your children "co-owners" before you die.

dbg31415 8y ago

My family ranch was in North Dakota. Most ranches and farms are set up so that there isn't much value if you don't sell the whole thing. You need land, the homestead (house, barn, shop, corals...), a water source (ideally multiple), roads in and out, fences carved the right way... Yes, you could likely sell a portion of the property, but the parts aren't worth the same as the whole. You'd likely eat the cost of adding in new windmills, water storage tanks, and developing the land in order to get it to sell if you were to carve out a part of your existing pastures and put it on the market. We basically ended up carving off the farm land and selling that, but we had to pay to put a road in... and fences on either side of the road, cattle guards, and it ended up costing $100k in materials and labor (since we had to hire people to do it given nobody lived out there any more)... all just to make $300k. TL;DR: Ranches are set up to be units, and while you can sell part of the land, it sucks to do so.

dbcurtis 8y ago

It absolutely was a thing in the 1970’s. I saw neighbor’s farms destroyed by the inheritance tax. The law was changed, so now the inheritance tax kicks in at a much higher level. Most farmers set up trusts now anyway. It wasn’t only farmers that got clobbered by the inheritance tax. The children of the local shoe store owner were in the same inheritance tax hell.

Latteland 8y ago
Was this in the 70s or more recent? I can't imagine a shoe store that costs more than $5 million.