 |
|---|
By Samantha Avoub, Associate Economist, American Farm Bureau Federation
Washington, DC, – expiration of many provisions of the 2017 Tax Cuts and Jobs Act (TCJA)adds a new task to the 2025 congressional to-do list: updating the tax code. Many TCJA provisions provided important relief for farm families. While reductions in the corporate income tax rates were made permanent in 2017, income tax cuts for individualsbegan to phase out in 2022, with the biggest tax increases coming with expirations at the end of 2025.
This Market Intel report is the fourth in a series exploringthe expiring TCJA provisions – including individual tax provisions, the qualified business income deduction, capital expensing provisions and estate taxes – and their impact on farm families.
For some families, grieving the loss of a loved one comes with an added burden: a hefty tax on everything their family member left to them.
The estate tax, also called the “death” tax, turns a time of mourning into a race against time to pay a government bill. Exactly nine months after the death of a family leader, some farm families owe the Internal Revenue Service (IRS) up to 40% of their farm’s value above an exemption limit.
Without an act of Congress this year, the estate tax exemption will drop by 50% to $7.61 million on Jan. 1, 2026, putting the future of thousands of farm families at risk. While these may seem like big numbers, most of the value of a farm is tied up in land and expensive machinery, which are needed to grow food and raise animals. Actual cash on hand is much lower, making payment of exorbitant taxes extremely difficult or even impossible.
