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They Are Going To Make It Nearly Impossible To Pass On A Farm Or Business To Your Children

Economic Collapse Blog: If you have a farm or a small business, would you like to pass it on to your children when you die? Well, unless Congress does something, it is going to become much, much harder to do that starting next year. Right now, there is a 5 million dollar estate tax exemption and anything above that is taxed at 35 percent. But on January 1st, the exemption will go down to 1 million dollars and the tax rate will go up to 55 percent. A lot of liberals are very excited about this, because they believe that the government will be soaking wealthy people like Warren Buffett and Bill Gates. But the truth is that a lot of farms, ranches and small businesses will be absolutely devastated by this change in the tax law. There are many farmers and ranchers out there today that do not make much money but are sitting on tracts of land that are worth millions of dollars.

According to the American Farm Bureau, approximately 97 percent of all farms and ranches in the United States would be subject to the estate tax if the exemption was reduced to just a million dollars. That means that the children of these farmers and ranchers would be faced with a very cruel choice when it is time to inherit these farms and ranches. Either they come up with enough money to pay the government about half of what the farm or ranch is worth, or they sell the farm or ranch that may have been in their family for generations. Needless to say, most farm and ranch families do not have that kind of cash lying around. Most of them are just barely making it from year to year. So this change in the tax law is going to greatly accelerate the death of the family farm in America.

This is also going to devastate many family-owned small businesses. Many small businesses don't make much money, but they have buildings or land or assets worth millions of dollars. Children that may have wanted to continue the family legacy will be forced to sell because of the massive tax bill that they get from Uncle Sam. This is an insidious cruelty, and it shows just how broken our system has become.

Read more: http://theeconomiccollapseblog.com/archives/they-are-going-t...

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family farm property

I agree. Sell the property to the kids...have a notarized contract that states particulars for personal needs in case family disagreements, divorces, deaths or other problems come to the horizon. I plan to sell my property over to my kids,

I'm no accountant but I

I'm no accountant but I wonder if it's possible to incorporate your farm/small business and have your family members be stock holders.

Or alternatively, have it placed into a trust that you technically "do not own" but only manage. Then have management responsibilities passed on to your children.

I don't know if any of this would work, and it certainly would be steep legal fees if it did. But it's worth looking into if you are in that position.

People should use all (legal) means to force the IRS to fight for every dime it steals.

“Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.” William Pitt

For arguments sake... If we

For arguments sake... If we have to have a tax funded society (which I do not believe nor advocate), why not something like the a single tax like Henry George proposed (land; since it is the only finite resource on earth that nobody creates yet all to one degree or another need)? Why not tax inheritances under the premise it is not earned income. In other words earned income should not be taxed no matter what "bracket" one is stationed. All speculated income, inherited income all other should be subject taxation since it is not the direct fruit of ones labor. This would nail the speculators in the nads.

hate liberty much?

confiscation of personal property is your mantra.

Mineral Rights

I doubt it will make land cheaper, and in many areas due to "mineral rights" land will be bought-up by oil companies that have the cash or credit. Some companies are already doing that instead of leasing mineral rights.

Start using Bitcoin and end this madness.

User defined privacy capable money is the only way to solve these type of problems and no amount of violence will ever be able to solve a math or chemistry problem. So you see, they can't take what they don't know you have. Gold and silver is good for this if you hold it hidden somewhere but it might be hard to get rid of in a hurry if you need to spend it.. and that's where bitcoins come in and are perfect for the job!

Read about major news in the Bitcoin world here:
http://www.dailypaul.com/263266/pay-another-way-bitcoin-by-w...

lol yeah right

instead of having a farm or business people should just sell it all (paying massive taxes on nominal "gains") and have a bunch of bitcoins, I call BS. Might be hard to get rid of in a hurry? Bitcoins are far more likely to be difficult to get rid of in a hurry than gold or silver, if you could get rid of them at all. The farmer I buy potatoes from at the market will accept silver coins, he won't accept bitcoins. I don't even know a single place where I can turn bitcoins into fednotes "in a hurry", I know of many places I could immediately obtain FRN in exchange for precious metals. Bitcoins have no use value, they aren't even coins at all. I would be careful keeping more than a small amount of your funds in bitcoin form there are a lot of risks many of which I am not even mentioning for brevity. Anyway neither bitcoins nor gold and silver solve the problem with the estate tax. Some people have to have farms and businesses that cannot be hidden, those people should not be forced to sell just because someone in the family dies and generates a massive tax bill.

really?

ok Bitcoins may be fine for smaller transactions, but get real, this is not going to solve the problem of transfering Real Estate.

A Trust may be a more realistic solution:
http://www.dailypaul.com/263866/they-are-going-to-make-it-ne...

Seems to me an easy way around this

is to sell the property for a ridiculously low price to the children before passing away. You can sell your property for any price you choose. It doesn't need to be market price.

nice try

the IRS considers selling something for less than market value to be a gift. Then instead of being subject to death tax you pay gift tax.

It's good to see

that everybody here realizes that they're dealing with thieves. For some reason a lot of people oppose the accumulation of wealth. They see something inherently wrong with it, as if by accumulating wealth you somehow strip away from others their means to provide for themselves. They figure it will lead to kings so wealthy that their influence will consume everything. I don't think this is the natural progression of things. Even when resources are finite and large disparity exists. For example, when I die, the fruits of my life should naturally fall to those I leave behind in a manner I think best fit. Likewise for others, their fruits should be distributed in a manner they see fit. This redistribution would naturally favour those who are most in need or most deserving without taking anything from anybody. Such accumulation of personal wealth and natural inheritance allows people to ensure the welfare of their children and serves the public good by not leaving behind dependents. In fact, natural inheritance is exactly what the monarchs of the past use to try and prevent. Property of an individual went to the first born son only, of which their could be only one between two people or any two families. Such was the means to prevent the natural tendency to distribute. This keeps the peasants poor and gradually weeds the wealthy down to a select few. Give yourself a few privileges in the process and you get a nice little feudal system. King me, anyone.

Yup, sound like you and your loved ones are going to get shafted when you die. One suggestion though. Since you're dealing with thieves that prey on the dead, try not to die. Better yet, don't die at all. Whose to say otherwise, anyway. You might live a recluse lifestyle somewhere tropical for 200 or 300 years as a retirement. In the mean time we'll keep working on nurturing liberty, your children wont be homeless, and maybe it won't be such a shity world to die in for much longer.

There is a BIG LOOPHOLE but time is running out.. 12/31/2012

From http://www.jsmineset.com/2012/10/05/in-the-news-today-1328/

Jim Sinclair’s Commentary

The forgiveness of gift tax on family wealth transfers up to $5,000,000 is going to die in less than 90 days.

I do not believe that any thinking political person can walk up to the fiscal cliff and just let it happen. At the least it will get the can kick down the political road as neither candidate wants the bill this event will carry. There is one tax deduction that I feel will not survive the can kick. It is the ability to transfer wealth to your family free of gift tax. In my opinion, I see October to December 31, 2012 as the end of being able to give up to $5,000,000 to your family members without being charged any gift tax. All of us work for our families and take great pride in seeing them succeed. In three months I expect the end forever of this tax break. Forever being defined as our lifetimes.

One way is to give some of your wealth to family members when we are still alive and able to see how they handle it. If they know this is a test, and their inheritance will be based on your review of how they handled money, they might just make you proud. Regardless of the amount you do, I feel it is better than enriching children upon your demise when you are not here to guide them or rate how they did. Think about it as it has less than 90 days to live, in my opinion no matter who is elected.

Tax-Free Gifting Strategies
Posted on November 15, 2011 by Financial Advisor

2011 Is a Good Year to Think About Tax-Free Gifting Strategies.

We all know that it is better to give than receive, but if possible, it can be even more advantageous to give and be tax savvy about it too! It is that special feeling in your heart from giving that makes it all worth it, but at the same time, there is nothing wrong with looking at tax smart ways to give as well. Even if you are not a famous philanthropist like Bill Gates, or members of the Rockefeller family, gifting money to your children and grandchildren can be a goal of yours.

In today’s confusing world there are several common strategies that you can use that allow you to gift some of the assets you have accumulated in your estate which in turn could possibly reduce the tax debts on your heirs when you pass. With proper gift planning it is possible to be generous and tax efficient at the same time.

Estate and Gift Taxes

Once your net worth exceeds a certain amount, your estate may be subject to estate taxes. Currently, an individual can gift up to $5,000,000 federally tax-free during their life or when they pass to a non-spouse beneficiary. If you are married, you can gift up to twice this amount, or $10,000,000. That is the federal amount that can transfer federal tax-free to non-spouse beneficiaries. This number is called the basic exclusion amount. (There is no limitation for a spouse to gift to their spouse as long as their spouse is a U.S. citizen.)

While exchanging or gifting large amounts of money to your spouse is considered tax free, this is not always a best solution to reducing your taxable estate. Unfortunately, this transfer could potentially increase the amount of tax you can potentially impose on your spouse’s estate. Gifting assets to your children, or grandchildren and other non-spouse beneficiaries is treated differently; however, there are still various ways you can provide some tax-free gifts for these special beneficiaries.

Unfortunately, today’s generous exclusions only apply for two calendar years. In 2013, unless Congress changes the current law, the federally tax-free amount will revert back to $1,000,000 per person, and the federal tax rate for many estates can go up to 55% (compared to the current maximum rate of 35%).

Many people are surprised when they learn that the gift tax is paid by the giver and not the receiver! It is sometimes hard to believe that the person making the gift is also the one that has to pay out of pocket any of these additional gift taxes. Talk about being generous!

In addition to all these federal taxes, you should investigate whether the state in which you reside might also tax your estate. Currently 16 states and the District of Columbia have an estate tax.

Sadly, nothing shocks me

Sadly, nothing shocks me anymore w/ the gov't & banking cartel. Its all about power & ensuring endentured servitude.

Behold, I send you forth as sheep in the midst of wolves: be ye therefore wise as serpents, and harmless as doves. - Matthew 10:16

Wrong! Buffet, Gates and Romney will pass theirs on.

It is the little people with lessor fortunes who's possessions will be robbed and then redistributed by the corporate fascists Buffet, Gates, Romney, Obama, her majesty, etc.

.

Cyril's picture

Hello Socialism, Phase 2 ! Goodbye Private Property !

Hello Socialism, Phase 2 ! Goodbye Private Property !

----
Refs.

Phase 1 was 2008-2012

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

bump

.

LL on Twitter: http://twitter.com/LibertyPoet
sometimes LL can suck & sometimes LL rocks!
http://www.dailypaul.com/203008/south-carolina-battle-of-cow...
Love won! Deliverance from Tyranny is on the way! Col. 2:13-15

I'm torn

I believe very strongly that all money and assets that are "new to you" should be taxed as ordinary income (though it would be fair to amortize the taxes over many years). But on the other hand, I see this as a land grab that will help the banksters and industrial "farming" industry by forcing families to sell.

Tough call. Maybe they could simply NOT reset cost basis on inherited assets so that inheritors don't skate away without paying tax, but they still must later pay if they sell.

Take back the GOP and Restore America Now.

Of course it should be taxes

Of course it should be taxed as ordinary income. And ordinary income should be taxed at a flat rate. Of zero percent. Just like Ron Paul advocates.

Only good thing about this nonsense, is it will help rural land get cheaper, instead of being overinflated the way it is now. And, I guess, it may teach a few more people the value of keeping ones savings in thoroughly blinded, mixed and untraceable Bitcoins, and perhaps some well hidden Gold.

closet commie alert

not a tough call for anyone who believes in liberty

TOUGH CALL???? how about no

TOUGH CALL???? how about no taxes!

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Il███████████████████].
◥⊙▲⊙▲⊙▲⊙▲⊙▲⊙▲⊙◤..

why not have your own

why not have your own Corporation own the farm? Doesn't that make sense?

please give link to actual

please give link to actual law. thanks.

That's the whole point of it

Elimination of private property for the little guy and tax theft. There will be loopholes and schemes for the Gates' and the Soros'.

Here's a possible way around it

When you get older, you can sell your farm or business to your kids. However, you have the right to sell your land for however much you please...sell it to your kids at a reasonable price or even for a dollar. At that point it's in their hands before you die and was sold and it doesn't fall in that tax category anymore. At that point you just owe the property tax, which would be the next big hurdle, because generally you do owe that at the appraised value. Oh the many layers if govt taxation.

I'm sure it depends too, but since most home/land sales are negotiable & the govt/states don't have mandates/laws that require you to sell it at the appraised value, you can sell it for whatever amount you feel like. But once people start doing what I said I'm sure they'll make a law requiring your sell to be within a percentage of that value.

This is a nice theory except

This is a nice theory except you will have to defend the value of the sale against the appraised value in court against the US Govt. If they find you sold it for well under market value, then you could be charged with tax evasion. At a minimum you will be forced to pay the true tax value. You will also find yourself in court defending your freedom and limited assets against an entity with seemingly infinite resources.

Not sure but....

I think that transfers of assets into family trusts also helps get around the same issue since trusts are living entities without a death date.

Wha? .....hey....who stole my country?

That is how you do it

Like you are saying, assets of a business can be transferred into a GRAT
(type of trust). Usually, this is done to transfer ownership without losing half the value of the company to the govt. in taxes upon death. Usually the person passing the assets into the trust has some sort of insurance policy in the event of death before the terms he or she has set up in the GRAT have transpired. I'm not sure exactly how they work, but they involve annuity payments to the grantor, and tax free transfer of the assets at the end of the terms. It's how Walton transferred Walmart to his heirs. I'm not sure how you would do it with a farm, maybe form a corp. and put shares into GRAT, but dying without protecting your business or assets from the thieving government is one of the dumbest things you could do to your kids.

I became aware of this trend around 1986

Began hearing from farmers that the rules were squeezing them out in favour of big coprorate agribusiness. Remember Farm Aid and all that?

Looks like doom for the family farm to me and our possession of our own food supply. Even reversing the legislative and judicial damage which has literally CONVERTED OWNERSHIP OF THE FOOD SUPPLY OF THE HUMAN RACE to private and non-human entities won't restore the situation: the whole ecosystem is getting saturated with GMO stuff. It's creeping through the food and organic chains.

To paraphrase Laura Roslyn, the tactical situation is that we lost. What does winning mean for us is this context? Difficult as it is, laws are easier to roll back than ecosystems.

There is nothing strange about having a bar of soap in your right pocket, it's just what's happening.

The logical answer to a death

The logical answer to a death tax is to become immortal. Corporations are immortal, people are not.

________________________________________

Nice!

Let's see what we can do....

(Well, there is this whole zombie thing fashionable right now!)

; )

What would the Founders do?