Page 7 - Farm and Food Policy Strategies for 2040 Series

farmland consider family legacy a top reason to keep their land, and such clients tend to be large
landowners, he said.

In similar fashion, Iowa State University’s extensive Iowa Farmland Ownership and Tenure
Survey 1982-2017, recently released, says 29% of all Iowa landowners say that “family or
sentimental reasons,” is “very important” to their land ownership – compared with 22% in ISU’s
2012 survey.

Besides the inclination to retain farmland, Congress has robustly expanded the incentives
to do so by way of changes in federal estate and gift taxes.

Jerry Cosgrove, adviser for AFT’s Farm Legacy Program, explains that, since Congress acted,
“if you hold onto (farm assets) until you die, the basis (for capital gain tax) will be stepped up
and there will be zero capital gains tax. And, as a practical matter, there is no estate tax now
unless you’re very wealthy. The federal estate tax exclusions combined (for a married couple)
are now more than $22 million.”

“There is really a strong disincentive now to transfer any appreciated asset, including
farmland, during your lifetime, either by gift or by selling it,” Cosgrove said.

Source: Iowa State University Extension

That deterrent may provoke a new surge in total farmland owned entities such as trusts,
estates, corporations (usually family corporations), versus those owned by individuals or
joint tenancy of farm couples. The tally for those entities has risen steadily, virtually doubling
from 72,063 in 1982 to 142,370 in 2012, while the total number of farms declined, and the 2017
census results, expected in April, may contain a new record.

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