WITH MATTOON pulling out of FutureGen contention, Tuscola is eyeing a possible second chance at a scaled-down project. ..2
G O V. PA T Q U I N N h a s restored some of the agricultural education funding that previously had been eliminated. ......................3
ARE THERE ENOUGH votes in the House to restore the biodiesel tax credit without attaching it to a tax bill? One congressman wonders. .......5
Monday, August 16, 2010
Two sections Volume 38, No. 33
Estate tax restoration a sobering prospect BY MARTIN ROSS FarmWeek
Periodicals: Time Valued
After years of delay in federal estate tax relief, farm families soon may be confronting “a scary reality,” U.S. Rep. Aaron Schock warned last week. The Peoria Republican told FarmWeek he is frustrated by a lack of congressional action on a series of tax issues, from extension of expired biodiesel and soon-to-expire ethanol tax credits (see page 5) to a longterm estate tax fix. Under 2001 Bush tax reform measures set to “sunset” at year’s end, estate tax exemptions phased up from $1 million per individual to $3.5 million in 2009 before the tax itself disappeared entirely for 2010. However, without congressional intervention, farm heirs could again face a mere $1 million exemption and a high 55 percent tax rate in 2011. The House has approved restoring a $3.5 million perperson exemption, but Farm Bureau supports Senate Ag Committee Chairman Blanche Lincoln’s (D-Ark.) bipartisan proposal to raise exemptions to $5 million per individual ($10 million per couple), adjusted for inflation, at a 35 percent top rate. Routine Illinois land values
alone easily can push farm estates over a $1 million threshold, Illinois Farm Business Farm Management (FBFM) analyst Bradley Zwilling said. Defaulting to a $1 million exemption “does not help our economy grow,” Schock said during a stop last week at Illi-
nois Farm Bureau board member Dale Hadden’s Jacksonville farm. “I’m not positive we will do something by this December, which would be a very scary reality for farmers who face a $1 million estate tax penalty,” he warned.
ATVs again allowed on the road — legally
“There are some people in Washington who believe death should be a taxable event — that because you pass away, the federal government should be entitled to a certain amount of your assets, no matter what that level is. We need to show them how $1 million, $3 million, even $5 million affects many of the small business people in America.” With statewide land prices averaging $4,650 per acre (per USDA’s latest figures), even a farm with “200 bare acres” of owned ground could trigger tax liability, without factoring equipment or other assets, he said. Hadden said Morgan County-area prices have been running $6,000-$8,000 for prime ground and $3,000-$5,500 for “C soil type” land. According to USDA’s 2007 ag census, 29.4 percent of Illinois farms topped $1 million in fair market value of land and buildings alone. In 2009, some 2,500 opera-
tors surveyed by FBFM averaged $2.2 million in total assets, including an average $1.1 million in land and other fixed assets vs. average total assets of $1.6 million in FBFM’s 2006 survey. “If you have a combine, a barn, and a few hundred acres, you’re there,” Schock noted. Lincoln’s estate tax measure also would include full “stepped-up basis,” enabling heirs to take fair market value of an estate for capital gains purposes and pay capital gains tax on the difference between the net sales price and that stepped-up basis once they sell assets. That helps producers who must liquidate some assets or heirs who buy out a sibling’s share of their inheritance, Zwilling told FarmWeek. But if the estate tax reverts to pre-2001 levels, Hadden said, “families are going to have to sit down at the table and reassess their goals” in terms of farm succession.
FARMER’S LITTLE HELPERS
of state legislation. Under state law, an ATV Farmers again can legally operator needs a valid driver’s drive all-terrain vehicles license to drive on a county (ATVs) and utility-terrain or township road, according vehicles (UTVs) on county to Kevin Rund, IFB senior and township roads for farm- director of local government. ing purposes. Gov. Pat Quinn Rund reminded ATV ownsigned the legislation last ers they also need insurance week. on the vehicle in order to The matter was a state leglegally drive it on the road. islative priority for Illinois He encouraged farmers to Farm Bureau. check their farm and home HB 6094, sponsored by insurance policies to ensure Sen. A. J. Wilhelmi (D-Joliet) they are covered for operatand Rep. Emily McAsey (Ding ATVs on a road. Lockport), allows farmers to During the last week of legally operate ATVs and May, Farm Bureau members UTVs on local roads and also made an extra effort to Illinois Department of Agriculture (IDOA) worker Elissa Marsh, left, to cross public roads with obtain passage of the ATV Friday helps 5-year-old Desiree Pflasterer of Lomax in Henderson them. The bill was effective bill, and Semlow thanked County color pictures in the new Farmer’s Little Helper area at the immediately. them for contacting their legIllinois State Fair. In the back, left, IDOA worker Brandon Smith “This legislation restores islators. quizzes Annely Yenn, 8, of Girard while her uncle, Dale Standefer of the ability farmers had to “That action helped ensure Florida, looks on. Children attending the fair learn about Illinois agriride ATVs on roads legally the issue was approved by the culture through hands-on activities provided by farm and commodities in time for harvest,” said General Assembly and put groups through Aug. 22. (Photo by Ken Kashian) Kevin Semlow, IFB director before the governor,” he said. FarmWeek on the web: FarmWeekNow.com Illinois Farm Bureau®on the web: www.ilfb.org
BY KAY SHIPMAN FarmWeek