Farmers Escaping Estate Tax

In Few Wealthy Farmers Owe Estate Taxes, Report Says, NY Times, July 10, 2005, David Cay Johnson explains that:

The number of farms on which estate tax is owed when the owners die has fallen by 82 percent since 2000, to just 300 farms, * * * the Congressional Budget Office said in a report released last week.

All but 27 farmers left enough liquid assets to pay taxes owed, the budget office found, although it hinted that the actual number might be zero. The study examined how much in cash, stocks and bonds these farmers left to pay estate taxes, but the report noted that no data existed on how much life insurance the farmers had put into trusts. Virtually all wealthy farmers own life insurance in trusts, say estate tax lawyers who specialize in working with farmers.

This information may be significant as Congress considers whether to make the repeal of the estate tax permanent.

Special thanks to Prof. Joel C. Dobris of the University of California — Davis for pointing out this article.