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These reports are published by the American Academy of Estate Planning Attorneys and cover a wide-variety of subjects relating to estate planning.


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Special Valuation Benefits for Farms and Other Business Real Property

HIGHEST AND BEST USE
Property in a decedents estate is valued for estate tax purposes by the "willing buyer-willing seller test". In the world of commerce, property generally changes hands for a price determined by agreement between a knowledgeable seller and a knowledgeable buyer. For purposes of this Report, this valuation concept relates to property which is not restricted as to its use. The buyer is not limited to the sellers previous use of the property.

The buyer may have a more profitable use for the property than the seller. This more profitable use is called the "highest and best use."

APPLICATION OF THE "HIGHEST AND BEST USE" TO THE FAMILY FARM
AND OTHER BUSINESS REAL PROPERTY

Real property is unique because the same acreage or parcel may be used for different economic purposes. Perhaps nowhere is this more true than with a Family Farm. However, this concept is also true with respect to other real estate used in a family business.

We need to discuss "value" for a moment. To a disinterested person, the value of an acre of real estate is the highest price for which that person could later sell the acre. There is no concern in a pure profit analysis, over the future use of the property by the new buyer. How does this disinterested persons actions affect the Family Farm or other closely held business real property?

Learn more about special valuation benefits for farms and other real property by clicking the link below. The rest of the Report discusses the following:

  • "Highest and Best Use": Meets the Estate Tax
  • "The Tax Man Cometh"
  • Internal Revenue Code Section 2032A - Estate Tax Relief for the Family Farm
  • The Technical Requirements
  • Planning for Spouses

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This Report is Compliments of Law Offices of Richard B. Schneider, LLC . If you would like a hardcopy of this report please email information@rbsllc.com or call (503) 241-1215 .

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