Okay gents, I am posting this in the American Big Game Hunting section because it will most definitely affect a lot of you, who may own pieces of hunting/recreational land in our great country.

I wanted to pass along an article I believe every American should read...but especially landowners. The article discusses the changes to our country's laws regarding the Estate Tax (also known as the "Inheritance Tax" or "Death Tax") that will go into effect January 1, 2013.

Here is a link to the article: http://wills.about.com/od/unde...es/a/futureoftax.htm

I have seen the devastating effects of Estate Tax first hand....on a large family-operated ranch in south Texas which we used to hunt on. Because of the tax, the ranch went from 64,000 acres to just over 12,000 acres....due to the family not having enough cash to pay the tax, and therefore forced them to sell most of the ranch at a severe discount, in order to raise the funds in time.

The tax does incredible damage to certain families who have large amounts of family land, but not much else in the way of cash and/or liquid assets. It really is a shame, and the new Estate Tax laws beginning in 2013 are certainly going to affect many more people than the current law. The new law is EXPONENTIALLY worse than what we currently are dealing with at this time....(the federal exemption will fall from $5,000,000 to $1,000,000 and the tax rate will rise from 35% to 55%). In today's market it is not uncommon at all for someone to acquire over $1,000,000 in land during their lifetime....which upon their death, will now be taxed at the unbelievably high rate of 55%.

Please feel free to pass this information along to anyone you can think of who might benefit from it.

And please also remember this when you vote next month....

I believe that there is no "Estate Tax" on inherited land unless the land is sold. Even then, if it is sold, then the sale is subject to capital gains taxes, not "estate taxes".

I read this post curious what this had to do with American Big Game hunting - still wondering. (and wondering why this is rated 5-stars?)

quote:

Originally posted by erict:
I believe that there is no "Estate Tax" on inherited land unless the land is sold. Even then, if it is sold, then the sale is subject to capital gains taxes, not "estate taxes".

I read this post curious what this had to do with American Big Game hunting - still wondering. (and wondering why this is rated 5-stars?)

You are incorrect.
And...we hunt "American Big Game" on...land.

Perry

From the IRS site:

The Estate Tax is a tax on your right to transfer property at your death.

quote:

Originally posted by Eland Slayer:
Okay gents, I am posting this in the American Big Game Hunting section because it will most definitely affect a lot of you, who may own pieces of hunting/recreational land in our great country.

I wanted to pass along an article I believe every American should read...but especially landowners. The article discusses the changes to our country's laws regarding the Estate Tax (also known as the "Inheritance Tax" or "Death Tax") that will go into effect January 1, 2013.

Here is a link to the article: http://wills.about.com/od/unde...es/a/futureoftax.htm

I have seen the devastating effects of Estate Tax first hand....on a large family-operated ranch in south Texas which we used to hunt on. Because of the tax, the ranch went from 64,000 acres to just over 12,000 acres....due to the family not having enough cash to pay the tax, and therefore forced them to sell most of the ranch at a severe discount, in order to raise the funds in time.

The tax does incredible damage to certain families who have large amounts of family land, but not much else in the way of cash and/or liquid assets. It really is a shame, and the new Estate Tax laws beginning in 2013 are certainly going to affect many more people than the current law. The new law is EXPONENTIALLY worse than what we currently are dealing with at this time....(the federal exemption will fall from $5,000,000 to $1,000,000 and the tax rate will rise from 35% to 55%). In today's market it is not uncommon at all for someone to acquire over $1,000,000 in land during their lifetime....which upon their death, will now be taxed at the unbelievably high rate of 55%.

Please feel free to pass this information along to anyone you can think of who might benefit from it.

And please also remember this when you vote next month....

quote:

Originally posted by erict:
I believe that there is no "Estate Tax" on inherited land unless the land is sold. Even then, if it is sold, then the sale is subject to capital gains taxes, not "estate taxes".

I read this post curious what this had to do with American Big Game hunting - still wondering. (and wondering why this is rated 5-stars?)

quote:

Originally posted by perry:

quote:

Originally posted by erict:
I believe that there is no "Estate Tax" on inherited land unless the land is sold. Even then, if it is sold, then the sale is subject to capital gains taxes, not "estate taxes".

I read this post curious what this had to do with American Big Game hunting - still wondering. (and wondering why this is rated 5-stars?)

You are incorrect.
And...we hunt "American Big Game" on...land.

Perry

So which forum would you have placed it?
It seems to have a place in this forum due to as Eland Slayer stated:

quote:

Originally posted by Eland Slayer:
Okay gents, I am posting this in the American Big Game Hunting section because it will most definitely affect a lot of you, who may own pieces of hunting/recreational land in our great country.
…I have seen the devastating effects of Estate Tax first hand....on a large family-operated ranch in south Texas which we used to hunt on. Because of the tax, the ranch went from 64,000 acres to just over 12,000 acres....due to the family not having enough cash to pay the tax, and therefore forced them to sell most of the ranch at a severe discount, in order to raise the funds in time.

The land does not have to be sold to qualify for inheritance tax it has to be INHERITED, hense the name…
erict, did you read the article?

As for 5 stars, it directly applies to anyone with large parcels of land after 2013. Maybe 2 stars would have been more appropriate for you, however if you own land and did not know the laws are changing in 2013…then 10 stars might be appropriate…lmao

Again, did you read the article?

quote:

I believe that there is no "Estate Tax" on inherited land unless the land is sold. Even then, if it is sold, then the sale is subject to capital gains taxes, not "estate taxes".

Ignorance can be cured, stupid is forever. You need to take some medicine in the form of knowledge. You are 100% wrong about the "Estate Tax" on inherited land that goes to anyone beside the wife of the descedent.

As many of you have verified, this tax ABSOLUTELY DOES affect land (when it is inherited)....regardless of whether or not it is sold.

erict,

To help illustrate my point....

If I am successful in achieving my life goal....I will hopefully be able to own my own hunting ranch of at least 1,000 acres here in Texas. At today's land prices in my desired areas, a property of this size (once improved with a few simple luxuries like roads, house, fencing, habitat improvement, etc...) will easily be valued at $3,000,000.

So for argument's sake, let's just say that is the only asset I own when I die....along with $500,000 in cash. The problem with that is, upon my death, my heirs will be responsible for paying a 55% tax on a total estate value of $3,500,000 MINUS the $1,000,000 exemption.....that leaves $2,500,000 which will be taxed. Therefore, my heirs are responsible for a tax burden of $1,375,000. They only inherit $500,000 in cash....so that leaves $875,000 they must pull out of thin air if they want to keep the ranch.

The majority of the time, heirs in this situation are forced to sell off at least part of the property in order to pay the taxes. To make matters worse, they must come up with this money in a relatively short amount of time (I believe the period is nine months). This usually causes the the property to be sold at a price less than market value, in order to make the deadline.

This can essentially ruin family heritage, and sometimes even their livelihood (in cases where the main family income is a result of farming/ranching/hunting operations). I'm sorry....but that is just wrong. The money being inherited has already been taxed!! The land being inherited has already been taxed!! It is just another case of the federal government sticking its greedy hands into places it has ABSOLUTELY NO business in.

I hope my example was clear and easy to understand. This is something I get very emotional and defensive about.

federal gov't completely out of control. VOTE brainchildren !

quote:

Originally posted by Eland Slayer:

This can essentially ruin family heritage

I think that is the point: redistribution of wealth.

quote:

Originally posted by JBrown:

quote:

Originally posted by Eland Slayer:

This can essentially ruin family heritage

I think that is the point: redistribution of wealth.

Another way to put it: Death of the American Dream...

If people PLAN properly, it is not an issue. If you know you are going to leave the land to someone, put them on the deed and title before you pass away and the land is theirs anyway, so no new tax. Both of my children are already on my properties as owners. Even if you change it later, it is still cheaper than the tax. I believe the 55% puts us back to Regan era.

Larrys
It is a little more complicated than that. It is a unified gift and estate tax. Still proper planning is essential. Did I mention that Sam Walton paid little or no estate tax.

Mike, I agree. In Mo, we just went through it when my father passed. Since we were all listed as owners on the house, there were no taxes involved. Planning is the key.

Don't forget you can always set things up in a trust.

quote:

If people PLAN properly, it is not an issue. If you know you are going to leave the land to someone, put them on the deed and title before you pass away and the land is theirs anyway, so no new tax. Both of my children are already on my properties as owners. Even if you change it later, it is still cheaper than the tax. I believe the 55% puts us back to Regan era.

You filed your gift tax return and paid the gift tax ... right?

LWD

In Missouri there is a Beneficary Deed that lets you retain ownership and do what you want(even sell if you want to), but at your death the persons on the deed own the property. If they get a licensed appraisal of the property they only pay on the increased value of the property when they sell it. I look for the money grabbers to try to do away with this.

Hawkeye

quote:

Originally posted by larrys:
If people PLAN properly, it is not an issue. If you know you are going to leave the land to someone, put them on the deed and title before you pass away and the land is theirs anyway, so no new tax. Both of my children are already on my properties as owners. Even if you change it later, it is still cheaper than the tax. I believe the 55% puts us back to Regan era.

Yes, that may be one way, but you have to consider the gift tax effect when they are listed. There are other methods, too, but as you say, planning is key.

This is no area for amateurs. A combination of trust and insurance works for some. I recommend asset protection too. Get a good lawyer in your State who knows what he is doing.

Is this increase O'bama's fault?

Alan

Take out a large life insurance policy on the owner(s) of the land, enough to cover the estate tax, use the proceeds to pay the tax.

It is a bit more complicated than that, but will get you started in the right direction.

Kww hornet
Which is why Warren Buffet is so big on the estate tax. He owns life insurance companies. Ya can pay the government or uncle Warren, take your pick.

you have up to dec 31st to give away 10 million bucks and most that can will not but if they don't the gov't will get their hands on it

quote:

Originally posted by GSSP:
Is this increase O'bama's fault?

Alan

Everything is obamas's fault.

quote:

Originally posted by MOA TACTICAL:

quote:

Originally posted by GSSP:
Is this increase O'bama's fault?

Alan

Everything is obamas's fault.

It might not be his fault, but it is his responsibility.

As has already been mentioned, proper planning nullifies the issue and makes it a moot point. However, the current state of things makes it a ripe moment to review one's life insurance portfolio; should transfer tax liablilty be contemplated, one can certainl, if insurable, set up an ILIT to purchase and house the insurance, thereby avoiding the 3 Year Rule on transfers out of the estate to cover liquidity needs and/or transfer tax needs.

Again, proper planning makes these silly tax issues a non-reality.

BTW, see a CFP NOT and accountant when it comes to life insurance planning.

The simple thing to do is incorporate the land with all involved as owners of The Corp.

In 1939 my Grandfather bought a small farm here in Alabama, 400 acres.In '72 he died, we sold most of the cows to pay the taxes but were able to hold onto the land. We have now put it into a trust, when my Mother dies I will be head of the trust then when I die my daughter will be head and so on.It does not take much land to put you over the limit and to have to sell the farm to pay the gov. taxes makes me sick. What right do they have to take 50% of something I have worked hard for over 40 years and paid taxes on it for that long. That really makes my blood boil. Hire you a good lawer and get it set up so the gov. does not take it.

I had a similar situation. To keep what you have, you will need a lawyer to draft a trust according to the laws of your state. Most of the time, you will not pay any estate tax or "death tax". Use the tax laws to your advantage!

quote:

Is this increase O'bama's fault?

Yes!! He is the one that allowed the exemption to be reduced from $5 million to $1 million. Just another of his many tax increases.