Farmers Legal Assistance Network

To visit the main page of the Farmers Legal Assistance Network, go to:  farmlawhelp.com



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PREPARING YOUR FARM FOR TAX DOOMSDAY

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                                    It has begun.   Nervous clients, including farmers and others, have started calling with growing concern   about what can only be described as nightmarish changes to federal tax laws.   Changes being discussed are a extreme reduction of the current federal estate/gift tax exemption, elimination of step up in basis, elimination of Section 1031 like-kind-exchanges, as well as other drastic changes being proposed by the new administration.   Before delving into the subject matter in more detail, people should remember the immortal words of Yogi Berra when he said, “it’s like déjà vu all over again”, and look back on December 31, 2012.   When the clock was to strike midnight, we were not going to see Cinderella’s carriage turn back into a pumpkin, but the federal gift and estate tax exemption was to plummet   from $5.12 million per person all the way to $1 million   per person.   Prior to that, taxpayers had enjoyed the ability to pass up to $5.12 mill
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The Chapter 12 “Cramdown”: Leveling the Lender's Playing Field.

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                                 This past week Congress was actually able to agree on something and the Family Farmer Relief Act of 2019 was passed.  The Act serves to raise the current debt limit for Chapter 12 from 4.2 million to 10 million.  Some have bemoaned this as only helping “big farms’, whatever that is, but in an era where a combine can approach a half million dollars, many smaller or medium sized farms found themselves up against the previous debt limit.   Without the ability to utilize Chapter 12, instead of restructuring, the famer is generally liquidating.             In helping many farm clients over the past year who have been experiencing financial difficulties, I am simply amazed at the inability of some lending institutions to work with the farmer who is experiencing financial difficulties.  Don’t get me wrong, some lenders have been very good to work with and are open to forbearance agreements, debt reconstruction, and other measures that keep the fa
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