Calling it a move to preserve future generations of family farming, Kansas Senator Pat Roberts today introduced legislation to exempt farmers and ranchers from the estate tax.
Sen. Ken Salazar, D-Colorado, joined Roberts in introducing the measure.
"As farms are passed down among the generations, estate taxes have made it increasingly harder to keep the operation in the family," Roberts said in a statement. "This legislation will go a long way to keep our young people farming into the future, preserving our rural way of life and our rural communities."
The Family Farm and Ranch Act of 2007, exempts a farmer or rancher from paying the estate tax as long as the following conditions are met:
*The farm was owned by the decedent or a family member for at least five years in the eight years prior to the decedent's death
*In the past eight years before the decedent's death, the decedent or a family member must have been actively involved in the management and operation of the farm for a cumulative period of at least five years
*The decedent or a family member must be using the land for farming purposes on the date of his death
*At the time of death, the decedent must be a U.S. citizen or legal resident of the U.S.
* Either (1) for at least three of the last five taxable years of
the decedent's life, over 50 percent of his or her income was acquired
through the business of farming, OR (2) the qualified farmland comprises over 50 percent of the decedent's adjusted gross estate at the time of death
The measure also included a "recapture tax" in the event that the heir
sells any interest in the farmland to anyone outside his family, and/or the heir ceases to use the property for farming purposes.