Coalition for Agricultural Estate Tax Reform

H.R. 3524
“Family Farm Preservation and Conservation Estate Tax Act”
Introduced by Representative Mike Thompson (D-CA) and Representative John Salazar
(D-CO) on July 31,2009, the bill has been referred to the House Committee on Ways
and Means.

The bill would set exclusions from estate taxes for certain farmland and related assets
so long as family farmland use continues. Additionally, the value of an estate would not
include the value of land in qualified conservation easements.

Estate tax exclusion for farms and ranches:

Requirements:
1) The decedent was (at time of death) a citizen of the United States and
2) During the 8 years prior to the decedent’s death there have been periods of a
combined five years or more during which the farm or ranch was owned by the
decedent, a family member or tenant.

Qualified farmland exempted:

Any real property and assets related to the farm operation which is located in the United
States.

Recapture tax if land is taken out of farming:

If, at any time after the decedent’s death the qualified heir sells the farm or the farm
ceases to be used by the heir for farming purposes there will be a recapture tax imposed.
The tax imposed would be calculated based on the value of the land at the time of dispo-
sition or cessation of use in farming.

Recapture tax for use incompatible with conservation easement:

For estate tax purposes, the value of the gross estate shall not include the value of land
subject to a qualified conservation easement. If, at any time after the decedent’s death
the qualified heir disposes of any interest in the qualified conservation easement (other
than passing it to a member of his family) or the land ceases to be used by the heir with-
in the terms of the conservation easement there will be a recapture tax imposed. The tax
imposed would be calculated based on the value of the land at the time of disposition or
cessation of use in farming.