A new bill would change the way farmland is evaluated
By Diego Flammini
Staff Writer
Farms.com
A bipartisan bill could make it easier for families to pass their farms to the next generation.
House Rep. Jimmy Panetta (D-Calif.) introduced the Preserving Family Farms Act of 2019 on Friday. Rep. Jackie Walorski (R-Ind.), cosponsored it.
If passed, the bill would modernize IRS Code Section 2032A to help farmland owners determine property value based on its use, not development value.
The bill would increase the maximum dollar amount allowed under the exemption from US$750,000 to US$11 million.
This increase would help protect farmers from extra costs should their farm or neighboring properties receive high valuations.
“This will help because, if you have a bigger farm (near a major city) and it got valued for development, it may be valued at such a high level that it wouldn’t fit into the estate exclusion,” Allan Vyhnalek, a University of Nebraska extension educator specializing in farm succession, told Farms.com.
“Getting it valued as farmland would keep them underneath that limit.”
Farm organizations thank the members of Congress for introducing the bill and helping put farm families in a better position to pass the business to the next generation.
“I applaud Representatives Panetta and Walorski for their leadership and dedication to protecting future generations of agricultural producers who seek to preserve a multigenerational legacy by maintaining a family-owned business,” Jennifer Houston, president of the National Cattlemen’s Beef Association, said in a Friday statement.
The AFBF also supports the bill.
“Allowing more farmland to qualify for special use valuation would elevate this provision of the tax code to its proper place as a helpful estate planning tool,” Zippy Duvall, president of the AFBF, said in a statement Friday.