Some scary numbers from Senator Grassley; unless Congress acts by December 31, the estate tax will return to levels not seen since 2001; an exemption of $1 million and a tax rate of 55%.
The size of an average Iowa farm is 333 acres. A medium-value acre of crop land is worth $7,877. In total, such an estate is worth $2.6 million.
But when its owner passes away and hands it down to his or her heirs, the rolled-back estate tax would transfer it forward with $1.6 million to be taxed at 55%. That's a payment of $880,000 to the U.S. government.
Grassley says the reduced exemption would impact 47% of Iowa's 92,000 farms. However, if Congress holds the exemption at the current $5 million exemption and 35% tax rate, only a small percentage will be affected.