These proposed rules will make it much more difficult for families to pass businesses on to the next generation of owners. Farmers and ranchers who operate in a family-owned partnership, LLC or corporation would lose a valuable estate planning tool that could result in increased estate taxes.
Farm Bureau officials say members need to raise their voices and make the Treasury Department withdraw these proposed regulations.
Under current rules, the value of inherited family business assets can be discounted (reduced) because of the following:
- Lack of Marketability: Current rules allow the value of assets to be reduced because heirs can’t easily sell their share of the family business. An example is a person who inherits part of a farm and would find it difficult to find a buyer who wants to be in the business partnership.
- Minority Discount: Currently, asset values can be reduced if heirs don’t have control over their share of the business. An example is a person who inherits less than half of a farm and can’t unilaterally make business decisions.
Farm Bureau members are asked to visit http://cqrcengage.com/afb/app/act-on-a-regulation?2&engagementId=253753 and submit a (pre-formatted) letter of support voicing their opposition to the proposed rule. Members are asked to edit comments to reflect their farm operation and stress the need to retain these estate planning tools for family farms and ranches.