In State Legislature of Maryland passed a law called the Family Farm Preservation Act that would substantially reduce the estate tax associated with farmers. However, the tax comes with a small caveat. To avoid the taxes that would otherwise incur, a person would have to pass what is considered “Qualified Agricultural Property” to a “Qualified Receiptent.” A person is able to exclude up to $5 million of qualified agricultural property. In this instance, a qualified receiptent is a person who enters into an agreement with the decedent to use the property for farming. If the person takes the property and does not use the property for farming, the taxes that were avoided can be recaptured.
See Nile, Barton, & Wilmer, Estate Tax Relief for Family Farms?, JDSupra, July 18, 2012.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
