Selling Your Property Because of the Death Tax

By December 12, 2007Taxation

Responding to a reader’s comment below

Oh, I love a good challenge! But, frankly I wish that I couldn’t document businesses, farmers and ranchers who have had to sell off to pay the tax. Unfortunately, I can. So,here goes:

  • Pete Bonds, rancher in Fort Worth Texas. Bond’s father was forced to sell part of the ranch to pay taxes to pass on the ranch to his children. He wants to maintain at least 1,000 acres but currently pays $48,000 annually for a life insurance policy. A fourth of his total gross incomes goes to pay insurance. He wants to keep the ranch in the family, but doubts they will survive.
  • Lewis Card Jr. of Hixon, TN started Card-Monroe Corporation runs Card-Monroe Corporation. But, his father started a carpet tufting business in 1930 – but sold the business in 1960 to prepare for the death tax. Shortly after, his dad and uncle started a new company called Tuftco Corporation. They sold that company in 1977 to pay estate taxes. Today, Lewis doubts that his company will survive to the next generation because of the same reason.
  • Sam and Ann Payne of Calhoun, GA have paid the estate tax twice on their ranch. They’ve sold land to local developers to pay taxes in the past, but they don’t think they’ll have enough land to continue operating into a third generation.
  • These three come from a National Association of Manufacturers document, “Death Tax Chronicle.”

    The challenge was to document one case of someone selling a truck or machinery — broadly defined, property — because of the death tax. Just for good measure here’s a list of other family-owned businesses, farmers and ranchers who have either sold off to pay the tax or are in jeopardy of losing their business: Richard and Lisa Hefner, owners and operators of Canadian Valley Ranch in Oklahoma; Mellano & Company in San Diego, CA; Janet Green, owner of Greens Printers, Inc., in Long Beach, CA; the Rhea family Cattle Company in Arlington, NE; Keystone Wood Specialties in Lancaster, PA; Mt. Pulaski Products, Inc. in Mt. Pulaski, IL; Electric Equipment and Engineering Co, in Denver, CO; Bear Valley Ranch in Parkfield, CA, Jerith Manufacturing Co., Inc, Philadelphia, PA; Hamilton Caster and Manufacturing Co., Hamilton, OH.

    Want more? I’ve got more. But I think you get the idea.

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