B2—Lancaster Farming. Saturday, Way 31,1980 Will a partnership work for BY SHEILA MILLER LITITZ One of the tools available to fanners and small businessmen in pluming their estates is the partnership. Similar to tenancy in common (where each person owns a percent of the property), a partnership sets up a system where each partner’s share is owned entirely by the individual. This share is the only portion of the partnership that can fall in the decedent’s estate. According to the Penn State Circular 567, Estate Planning for Pennsylvania Families, “the value of the deceased partner’s share can be transferred as spelled out in a partnership agreement, if there is any, or by the decedent’s Will, or by the laws of inheritance. So, once the value of the partner’s share is deter* mined, it enters that in dividual’s estate. Penn State points out that only the value can be transferred—not the partnership itself. “A partner cannot transfer the right to be a partner in the partnership. The old partnership ter minates upon the death of any partner, unless special provisions are made.” Is a partnership a feasible idea for a farm? Richard Dennison, of the Pennsylvania Farmers Association’s legal services stated that it is a method for bringing the next generation into the business without a large captital outlay. “A parent jnay decide to have one of the children in partnership. That young person may have limited capital. “To overcome this, Mom or Dad could rent the cattle and equipment to the child under a partnership agreement. Any new equipment and cattle would be bought J>y the part nership. “In about 5 years, the young fanner would have half interest in the cattle under normal culling, and in 8 years would have half interest in the equipment without going into debt, except for the dollars laid out to make the new equipment purchases”. This ‘growing-in’ management is an alter native to the parents having an outright sale of half in terest to the child, eliminating income tax consequences for the parents: But, Dennison admitted, there are situations that might require an outright sale. “If an outright sale is the only choice, even if the parents sell out over a period of years,” he added, “it would be considered an installment sale where a minimum of 6 percent in terest would have to be collected.” Dennison spoke primarily of a parent-child part nership. Concerning a husband-wife partnership, he said “In my opinion, there will not be many formed.” His reasons behind this statement stem from social security and its benefits. “A legal partnership would allow the husband and wife to both pay social security for proof of farm ownership. But unless the husband is earning more than what he could claim under maximm social security, this wouldn’t make much sense because the wife can generally collect on his social security. If this earn ings are reduced so that she can pay social security, their eventual pay out may be lower.” Jessee Cooper, a farm management specialist from organization like a part- Penn State pointed out that nership, the following items when considering a business need to be studied: Over, . Morton Building owners are proud of their buildings l They have the satisfaction and knowledge that their buildings have the highest quality, the finest workmanship and the strongest warranty on the market today. Morton co-ordinated colors and trim create clean, uncluttered designs...so their appear ance is unmatched in making them beautiful V -*s Ph 814-383 our estate? —captital available; need to analyze the family -expense to organize and situation: age, education, operate; marital status, goals and —taxes; objectives. —legal entity; The farm business needs —life of business; to be looked at closely, he —and ease of transfer. (Turn to Page B 4) Cooper also pointed out the Let your m* itffo Sweetlix* Fly t Worm Blocks contain V.GIIK phenothiazme, an insecticide that kills horn trill flies, ,ace ,llts ’ hookworms, nodular worms IUISIX and stomach worms Cattle can’t resist the m a taste of Staley’s patented molasses salt OWu Hies formula and that helps assure sufficient intake todothejob Allyoudoissetouttheblock l aflH See us for Sweetix Fly and Worm Blocks plus the, complete line of Staley Livestock worms! Produrts Sweetlix FLY & WORM Block We Have It! iLjLTWft Ask Your Local suq j -g : I ||| Farm Supplier j office, repair shop or even gram storage... Morton has just the righttuildings to fit your specific needs. Remember, each building carries the strongest written warranty which gives you the assurance that is is backed by a financially sound company. Warranty cover age includes: 40 years on posts, 5 years on paint and 5 years on • nd or snow load'' im; TELEPHONE NO, /■J •£*k-
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