Changes in estate tax coming

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					                                                                                                                                  www.WallacesFarmer.com ● October 2009                 7


Iowan named to head USGC
                                                                                                              coarse grains such as corn to

F
      ORMER USDA Undersec-                                                Board of Regents. He was also a
      retary for Rural Develop-       Key Points                          member and officer of the Iowa       the world market.                      He said it
      ment Tom Dorr is the            ■ Iowan Tom Dorr new president      and National Corn Growers as-           “USDA Ag Secretary Tom           “I first
new president and CEO of the            and CEO of U.S. Grains Council.   sociations. Dorr, who is from       Vilsack spoke at a conference        became fa-
U.S. Grains Council based in                                              Marcus in northwest Iowa, was       in Iowa recently about the
                                      ■ USGC largest U.S. grain export                                                                             miliar with
Washington, D.C. Beginning              market development group.         president of a family farm and      complexities of the world grain      the Grains
Nov. 16, he’ll head the coun-                                             agribusiness firm for 29 years.      trade,” says Dorr. “He’s right.
                                      ■ Dorr offers ag, financial and                                                                               Council back
try’s largest export market                                                                                   It’s not a simple business. It’s     in the mid-
                                        business experience to the job.
development organization for                                              Opportunities, challenges           complicated, and there are so-       1970s when
corn, barley, sorghum and their                                           Dorr’s first priority is to work     phisticated issues, particularly     we were es-
coproducts.                         cial and business experience          with the council’s membership,      involving biotechnology and          tablishing the corn checkoff
   Dorr says being an Iowa          that qualifies him to lead the         board of directors and staff to     which countries accept grain         in Iowa, and I firmly believe in
farmer for more than 30 years       organization. “Tom Dorr has a         clearly define not only the chal-    with specific traits.”                the mission of the organiza-
and serving seven years with        long history of service to ag-        lenges, but also the opportu-           Markets change over time.        tion.”
USDA gave him the opportu-          riculture and rural America,          nities for international grain      “You think about corn flowing                              Tom Dorr,
nity to understand and value        especially U.S. agriculture, and      trade. “It’s an honor to work       from your bin, into a truck, into                new CEO of USGC
the nearly 50 years of export       truly understands the day-to-         for an organization that’s de-      a train and, ultimately, into a
market development efforts of       day challenges U.S. farmers           veloped trusted relationships       big ship,” says Dorr. “Now we
the council.                        face. He has an ability to fa-        with international government       see an evolving market for           grain,” he says. “Yet over the
   “I’m very familiar with the      cilitate consensus and enable         leaders, livestock producers        distillers dried grains and op-      long term, they refuse to buy
worldwide market develop-           unity resulting in solid solu-        and grain processing firms           portunities to do more foreign-      much from us. China is another
ment programs the council has       tions,” says Fruth. “He’ll have       worldwide,” he says. “USGC’s        market development work. We          unpredictable market that’s a
conducted since 1960,” he says.     an exceptional global staff           membership intends that we          can help potential customers         potential large buyer. Several
“USGC is focused on global ini-     ready to help him serve.”             continue to build on success.”      build their livestock industries     years ago China began selling
tiatives, but its real purpose is       As undersecretary at USDA,            Dorr succeeds the retiring      and improve the diets of their       grain and displaced some of
to sustain and build economic       Dorr led programs to expand           Ken Hobbie, who has been            citizens. In many cases that         our market. But USGC has
opportunity not only for rural      rural entrepreneurial efforts,        USGC’s president and CEO for        helps them use their own grain,      had an ongoing effort in China
America, but worldwide. I’m         rural housing and rural infra-        the past 18 years of his 33 years   too, to feed their livestock, in-    for years, helping develop a
excited about this privilege to     structure, including electric,        with the council.                   stead of selling it on the world     feed and livestock industry in
serve U.S. farmers and agri-        broadband and water services.             The U.S. faces challenges       market competing with us.”           China. Now China is using all
businesses.”                        Dorr has served as a member           from other major exporting              It’s a continuing challenge to   their corn internally, so we’ve
   Rick Fruth, USGC chairman        of the board of directors of the      countries, especially those ex-     sell U.S. grain to countries that    gained back the markets China
and an Ohio farmer, says Dorr       7th District Federal Reserve          porting soybeans. The U.S. is       use the U.S. only as a residual      had taken away from us.”
has broad agricultural, finan-       Bank of Chicago and the Iowa          still the dominant supplier in      supplier. “Russia could use our         Source: USGC, ICGA


                                                                                                                                                     Volume 134 ■ Number 10


 Changes in estate tax coming?                                            economy and diminish rev-
                                                                                                                                                    Fast find:
                                                                                                                                                   ■ NewsWatch ....................1
                                                                                                                                                   ■ Opinion .......................12


E
       STATE planning has                                                                                     farms and ranches.                   ■ Crops ..........................14
       become more compli-          Commentary                            enues even further.                    However, those subject            ■ Technology/Machinery....26
       cated in recent years        By ROGER McEOWEN
                                                                              Earlier this year a couple      to the tax pay a 45% rate, so
with changes in the federal                                               of bills were introduced to         the rate of tax is important to      ■ Farm Management .......35
law adjusting the estate tax                                              deal with the estate tax over       these families. And, the rev-        ■ Conservation ...............41
rate and altering the size of       split on what should be done.         the long haul. The one backed       enue generated by the estate         ■ Livestock .....................45
an estate that is exempt from       They already have a busy fall         by the Obama administration         tax is coveted by the federal        ■ IRON Search ..................... 53
estate taxes. In recent years,      agenda. So the best guess is          would simply make the $3.5          government — about $20 bil-
the exemption has risen from        that Congress will pass a one-        million exemption permanent         lion to $25 billion per year.        ■ Classified/Marketplace . 61
$600,000 to its current level of    year extension of the 2009 law        (maybe even index it for infla-         If Congress does nothing to       ■ Country Life ................72
$3.5 million. Likewise, the top     ($3.5 million exemption and           tion) and retain (we think) the     change the law that is set to        ■ Marketing ........................ 73
estate tax rate has fallen from     full basis step-up) and deal          full basis step-up rule for prop-   take effect beginning in 2010,
55% to a flat rate of 45%.           with this issue as part of a          erty included in a decedent’s       estate planning will be a real        Contact us:
   The gift tax rate has            broader package of tax reform         estate. The bill would also kill    headache. What should you             Editor: Rod Swoboda
dropped along with the estate       next year. That’s the easiest ap-     valuation discounts for non-        do if Congress doesn’t act?           rswoboda@farmprogress.com
tax rate and is scheduled to be     proach at the current time.           business interests in family           The advice will be to either       6200 Aurora Ave., Suite 609E,
                                        Beginning in 2011, a whole        limited partnerships.                                                     Urbandale, IA 50322
35% beginning next year when                                                                                  die in 2010 or start gifting prop-    Phone: 515-278-6693
the estate tax is repealed for      host of tax provisions expire                                             erty in large amounts to avoid
one year. Also on tap for next      that will boost taxes for just        Impact of estate tax                the estate tax reinstatement          Contributing Editors:
year is the removal of the com-     about all taxpayers unless            Remember, the estate tax            in 2011 with only a $1 million        Tom J. Bechman, Dan Crummett,
                                    Congress takes action. So, the        doesn’t apply to many es-                                                 Josh Flint, Pam Golden, Alan Newport,
plete stepped-up basis rule for                                                                               exemption. The change in the          John Otte, Arlan Suderman,
property included in a dece-        future of the estate tax could        tates. According to the Internal    basis rule will create havoc          Lon Tonneson, Jason Vance and
dent’s estate. That rule would      be part of a package that deals       Revenue Service, in 2007 (the       for decedent’s estates in 2010.       John Vogel
be replaced with a rule that        with that issue. The last thing       most recent year for which IRS      Congress already tried that
                                    Congress wants is to add a fur-       has data) only 17,400 estates                                             Executive Editor: Frank Holdmeyer
allows for only a partial basis                                                                               approach in the 1970s without         Corporate Editorial Director:
step-up in many situations.         ther drag to a weak economy           were taxable (out of about 2.3      success.                              Willie Vogt, wvogt@farmprogress.com
   Then it all turns around         by piling on additional tax           million deaths), and only a            So, stay tuned — and get
                                                                                                                                                    Sales: Susie Decker 319-377-3080
again in 2011: The estate tax       increases that will slow the          small subset of those involved      ready to update your estate
comes back but with only a                                                                                    plan … again.                         Subscription questions:
$1 million exemption and a                                                                                       For information on estate          800-441-1410
55% top rate (but the com-                                                                                    planning and other legal              For additional sales and company
plete basis step-up rule is re-                                                                               issues related to farming, visit      information, see the last page of
instated).                                                                                                    www.calt.iastate.edu.                 the Marketplace section.
   So, is anything brewing                                                                                       McEowen is a professor
in Congress to deal with the                                                                                                                        POSTMASTER: Send address
                                                                                                              of ag law and director of the
                                                                                                                                                    corrections to Wallaces Farmer,
drastic changes set to occur                                                                                  Center for Agricultural Law           255 38th Ave., Suite P, St. Charles,
next year? Maybe.                                                                                             and Taxation at Iowa State            IL 60174
   Congressional leaders are                                                                                  University.