Families should consult their estate attorney to make certain the farm qualifies for IRC Section 2032A, as it is imperative that all of the rules be followed closely. However, in order to qualify for Special Use Valuation, there are a number of specific requirements that must be met in order for an estate to use IRC Section 2032A to value farm property. Valuing farmland at its productive value can save a significant amount of estate tax versus valuing it at fair market value. The essence of how Section 2032A works is to allow farmland to be valued by establishing a farm’s productive value, which is usually less than the farmland's fair market value (what it would bring if sold for its highest and best use). Regrettably, that perception often is based on a lack of accurate information concerning the complexities of how 2032A works, and of its true advantages and disadvantages. Many believe 2032A is easy, uncomplicated, and the primary method of solving farm estate planning problems. Special Use Valuation is an alternative valuation method of valuing of farm property based upon its production capacity rather than fair market value. Orville testified before Congress, which adopted "Special Use Valuation." This legislation saved countless family farms from being lost due to the need to pay estate taxes and continues to shelter these family farms today. Orville Bloethe, a Victor, Iowa attorney, and a handful of others helped develop the idea of "Special Use Valuation” valuing farmland at production value instead of fair market value. During the Farm Crisis, many family farms were being sold to pay estate taxes. Special Use Valuation, IRC Section 2032A, was created during the Farm Crisis of the 1980s as a way to help farmers keep their farms.
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Using Special Use Valuation Internal Revenue Code (IRC) §2032A is one-way farm families can reduce the estate tax burden for family farms. However, early and effective estate planning can help reduce the estate tax burden of transferring family owned assets to the next generation by using several methods as set forth in the Internal Revenue tax code. Many farm families find themselves asset rich and cash poor when a parent or spouse dies. This increase in value has made it increasingly difficult to pass the family farm to the next generation as many farm family estates are large enough to be subject to state and federal estate taxes. This is more than a threefold increase in value of a typical central Iowa farm. A typical central Iowa high-quality farm that sold for $2,848 in 2002 now sells for approximately $9,299 per acre according to the Iowa State University Land Value Survey. Or, add Dreary to 321 and search 321 Dreary together.įinally: If you are still not finding the property you are looking for, please do not hesitate to pick up the phone and call our office for assistance, or stop by any time.Ĭontact any of our 3 office locations, which you can find at the bottom of this page.Farm families face a unique challenge of transferring the farmland from one generation to the next, especially with the increase in farmland values the last fifteen years. You should receive a list of all properties in the county with the address 321, and that list should be short enough for you to find the property you're looking for.Īdditional Help: If your initial search brings back too many results, then add just one more parameter to it and search again.Įxample: Add John to Smith and search John Smith together. Dreary Ln., try typing in 321 and hit enter. Therefore, the less you type into the search bar, the quicker you will find results.Įxample 2: If the property you are looking for 321 N. Step 2: Use as little info as possible to search for a property.Įxample 1: If the owner of a property is John Smith, start by typing in Smith and clicking search, rather than typing in the entire address.Įxplanation: The way properties are entered into our system is different than the way they appear as a mailing address.