The effects of the Federal estate tax on nonindustrial private landowners

Tamara L. Cushing
Steven H. Bullard, Stephen F. Austin State University, Arthur Temple College of Forestry and Agriculture
John L. Greene
Theodore Beauvais

Cushing, T., S. Bullard, J. Greene, and T. Beauvais. 2000. The effects of the Federal estate tax on nonindustrial private landowners. In: Proc. South. Forest Econ. Workshop, April 18-20, 1999, Biloxi, MS, pp. 145-148.


The federal estate tax is designed to tax the transfer of accumulated wealth at the death of the taxpayer. Between 1987 and 1997, the estate tax was as high as 55% of assets above $600,000. Timber and land values have increased significantly in many areas of the U. S. in recent years, and in some circumstances heirs liquidate timber, or sell or develop portions of inherited timber and agricultural lands to pay federal estate taxes. To better understand how the estate tax is affecting timberland owners, a survey was conducted of members of the Mississippi Forestry Association in 1998. Survey questions involved estate values, and estate tax liabilities that were incurred between 1987 and 1997. Respondents were asked if it was necessary to harvest timber, or to sell land from the estate to pay federal estate taxes. Responses were obtained from 1,385 people (a 66% response rate). Of the 1,385 respondents, 192 had been involved in an estate between 1987 and 1997. Forty-five percent of the estates exceeded the $600,000 exemption; 12% of the estates exceeded $3 million and were taxed at the highest marginal rate. Thirty-four percent of the estates paid federal estate taxes. Almost 10% responded that timber was harvested to pay federal estate taxes.