Less Than 1 Percent of Farm Estates Owed Federal Estate Taxes in 2020

Tia McDonald and Ron Durst

Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, 2021, vol. 2020, issue 04

Abstract: Created in 1916, the Federal estate tax is a tax on the transfer of property from a deceased person to their heirs at death. Because it applies only to that portion of an estate’s value that exceeds an exemption amount, the tax has never affected a large share of estates. Moreover, legislation enacted over the last several years has greatly reduced the scope of the tax. The tax exemption has increased from $675,000 in 2000 to $11.58 million in 2020. Under present law, the estate of a person who at death owns assets in excess of the exemption amount must file a Federal estate tax return. However, only returns that have an estate above the exemption after deductions for expenses, debts, and bequests to a surviving spouse or charity are subject to tax at a rate of 40 percent.

Keywords: Agricultural Finance; Farm Management; Financial Economics; Land Economics/Use (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uersaw:310380

DOI: 10.22004/ag.econ.310380

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