You’ve been granted free access to this subscribers only article.
Cattlemen chew over being ‘land rich and cash poor’
Bruce W. Stroup, LUTCF, MBA of Platinum Wealth Solutions of Texas explains the current estate tax rate to members of the South Central Texas Independent Cattlemen’s Association at the chapter’s quarterly meeting Oct. 23 in Falls City.
FALLS CITY -- As the nations waits for the repercussions of “Taxmageddon” -- a one-year $494 billion tax increase slated to affect the U.S. economy, including the expiration of tax policies and the beginning of major tax increases associated with ObamaCare -- cattlemen were briefed on changes with the current estate tax exemption level and rate that expire Dec. 31. Cattlemen attending the Oct. 23 South Central Texas Independent Cattlemen’s Association chapter’s quarterly meeting in Falls City received insight to prepare for the future via estate planning.
Nicolas C. Valenti and Bruce W. Stroup, LUTCF, MBA, of Platinum Wealth Solutions of Texas, LLC, addressed the importance of estate planning.
A rancher’s estate includes the land, livestock, house, outbuildings, equipment, investments, and mineral rights, Valenti said.
When it comes to estate taxes, Stroup said the rancher is considered “land rich and cash poor.” With the current exemption of $5 million per individual (or $10 million per couple), usually no estate taxes are due on a farm or ranch. If Congress does not act before Jan. 1, however, the current exemption level drops to $1 million per individual. Values exceeding the exemption level are currently taxed at 35 percent and will increase to 55 percent. Stroup said the tax is due nine months after death; with proper structure, estate taxes can be avoided.
Valenti gave examples if the 2013 rate goes into effect. A $5 million cattle ranch could be faced with a $1.65 million estate tax bill at the higher rate. With the ongoing Eagle Ford shale oil and natural gas exploration, Valenti said a $10 million estate could face a $4.4 million estate tax bill.
Stroup added that landowners should be careful with protecting their assets, since most oil/gas production maxes out within three to six years.
Also addressing the estate tax issue was issue was W.V. “Bill” Hyman, executive director of the Independent Cattlemen’s Association of Texas (ICA). While this issue may be discussed on Capitol Hill during the Lame Duck Session, another concern is the Farm Bill. Both issues might be considered in the new year, with retroactive clauses added, he said.
Hyman also spoke of the upcoming state legislative session. The state budget, school funding, and the Texas Water Plan are among the top three items to be discussed, Hyman said. He said a special session might be in order to discuss one or all three of the issues, if not resolved in regular session.
Hyman also addressed other programs that will go into effect Jan. 1, including the state animal identification program. For more, see page 1D.
Your Opinions and Comments
Be the first to comment on this story!
You must be logged in to post a comment.
Agriculture Today Archives
Customs intercepts pest new to the United States (May 25, 2016)
Does wounded tree have a chance? (May 25, 2016)
Livestock Market Reports (May 25, 2016)
Mother Nature whips Wilson County crops (May 25, 2016)
Scrapie confirmed in Texas (May 25, 2016)
TDA Market Recap (May 25, 2016)
Texas Hay Report (May 25, 2016)
Beef cattle seven-year decline ends (May 18, 2016)
Educational video for water well owners (May 18, 2016)
Free Beef Quality Assurance training set for May 25 (May 18, 2016)
Fretwell wins Region 8 high school all around rookie saddle (May 18, 2016)
Grant to restore, enhance the monarch butterfly habitat (May 18, 2016)
Grass-fed beef conference (May 18, 2016)
Gun safety and barbecue in New Braunfels (May 18, 2016)
La Vernia Poultry Judging wins state, advances to nationals (May 18, 2016)
Lawn, landscape, rainwater program May 21 in Floresville (May 18, 2016)
Lesser prairie chicken off the list (May 18, 2016)
Livestock Market Reports (May 18, 2016)
Luling Foundation Field Day (May 18, 2016)
Protecting your tomatoes (May 18, 2016)
TDA Market Recap (May 18, 2016)
Texas Hay Report (May 18, 2016)
As El Nińo fades, expect warmer, drier weather says Texas A&M expert (May 11, 2016)
Floresville team wins second at state (May 11, 2016)
Livestock Market Reports (May 11, 2016)
Llamas, load up! (May 11, 2016)
TDA Market Recap (May 11, 2016)
Texas Hay Report (May 11, 2016)
Transplanting mountain laurels (May 11, 2016)
2016 La Vernia Junior Livestock & Poultry Show (May 4, 2016)
Beef, forage symposium May 10 (May 4, 2016)
Cattle raisers’ crime watch (May 4, 2016)
Corn acreage increases in Texas (May 4, 2016)
Help controlling the weeds (May 4, 2016)
Krueger leads the way at La Vernia stock show (May 4, 2016)
Land Heritage nomination deadline nears (May 4, 2016)
Livestock Market Reports (May 4, 2016)
TDA Market Recap (May 4, 2016)
Texas Hay Report (May 4, 2016)
May 2016 Gardening Calendar (May 1, 2016)