Effect of the Federal estate tax on rural land holdings in the U.S.
Greene, J.L., T.L. Cushing, S.H. Bullard, and T. Beauvais. 2002. Effect of the Federal estate tax on rural land holdings in the U.S. In: Proc. Forest Law and Environmental Legislation, IUFRO Research Group 6.13, Zurich, Switzerland, pp. 97-106.
There is considerable evidence that the effect of the federal estate tax on transfers of rural land holdings is increasing. To provide insight into the magnitude of the effect, the Mississippi State University, Forest and Wildlife Research Center, and the USDA Forest Service, Southern Research Station, have cooperated in a study to gauge the effect of the federal estate tax on nonindustrial forests and other rural land holdings. Data for the study were collected by means of a mailed questionnaire, using the Dillman Total Design Method. Random samples of two national forest owner organizations and a national database of rural landowners were surveyed. The results for forest owners indicate that 36 percent of forest estates owe the federal estate tax, a rate many times higher than the U.S. population in general. In 40 percent of the cases where a federal estate tax is due, timber or land must be sold to pay part or all of the tax. The amount of forestland that must be harvested to pay the federal estate tax appears to be on the order of 1.0 million ha (2.6 million ac) per year, and the amount of forestland that must be sold appears to be on the order of 0.5 million ha (1.3 million ac) per year. Of the land sold, it appears that 29 percent is developed or converted to other uses. The responses from forest owners and other rural landowners were more remarkable for their similarities than their differences. There was no statistical difference in the responses from the two groups regarding location of the land, form of ownership, value of the gross taxable estate, size of the holding, whether it qualified for “special use” valuation, whether “special use” valuation was used, amount of estate tax paid, reasons land was sold, or current use of land that was sold.