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USDA: Expiring Estate Tax Provisions Would Increase Taxes for Farm Estates

The 2017 Tax Cuts and Jobs Act significantly changed Federal individual income and estate tax policies, though some were temporary. In 2018, the legislation increased the estate tax exemption amount from $5.49 million to $11.18 million.

This increase is set to expire at the end of 2025. The exclusion amount will revert in 2026 to $6.98 million per deceased person. Researchers with USDA’s Economic Research Service estimate the expiring increased exemption would be $13.95 million per person at the time of the expiration. Lowering the estate tax exemption level in 2026 is estimated to increase the percentage of farm operator estates taxed from 0.3 to 1.0. Large farms would experience the largest increase in the share of estates owing estate tax, increasing from 2.8 to 7.3 percent.

Total Federal estate taxes for farm estates would be expected to more than double to $1.2 billion if the provision were allowed to expire.

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