Economic Recovery Tax Act BY DEBBIE KOONTZ LANCASTER Last week President Reagan signed the Economic Recovery Tax Act, and Lancaster Farming reported an overview on the Act as it will affect farmers. With more information and some predictions available at this time, we’d like to summanzelast week’s report and delve into the savings you as farmers ban expect from the Act. Perhaps the biggest savings for the farm will be the possibility for couples to leave estates worth 1.2 million dollars tax free to heirs and not have federal tax to pay. An entire estate can be given to a survivor with no federal death tax due for surviving spouses of decedants who die after this year. An estate of up to $600,000 can be left at death with no federal tax by the mid 1980’s, it starts nsmg gradually next year, moving from $175,000 to $225,000. Also, for decedants to use lower value rules on estates for farms, the decendant needn’t have been as active in management You can’t buy a better Glass fused to steel structure for your corn storage needs. □ Your Choice of Roofs: Fiberglass or Steel (Glass Fused) □ Your Choice of Unloaders; Laidig Jr. Powersweep or Neco Gravity Flow Auger □ Your Choice of Color of structure: Light or Dark Blue □ Your Choice of Service and Parts From Many Local Laidig Dealers □ Your Choice of Payment Plans: Purchase or Lease LEASE A SEALSTOR WITH ONLY ONE PAYMENT IN ADVANCE ♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦a-* * Before you buy, take a good look at ♦ Notice: Special prices for early order ♦ Sealstor...You can afford to buy the £ Laidig Jr. gram unloader ♦ best ♦ conversions ♦ . . . ♦ see page 833 $ ★ We now install service tunnels in ♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦ grain structures foreasy and low cost maintenance, another first with Sealstor Each Sealstor Salesman Has One FAIR SPECIAL Which he can offer you at a SPECIAL PRICE These units will be delivered after your local fair operations as was previously necessary. This is retroactive to estates of people who died in 1977 or later. But how about some history on estate tax to give us some per spective on the situation: Senator Roger Jepsen reports in his bi-monthly agricultural commentary that the estate tax was passed back in 1916 with two goals in mind to pay for World War 1 and to end any chance that pockets of wealth would form in this country. He says, “The arguments for appeal (against this early estate act) are just as clear cut. First, the estate tax brings in an in significant amount cl money just about one and a half percent of federal revenues in 1980. Second, the tax has proven to be an in tolerable burden on farmers and small businessmen the middle class the backbone of this country and the people who can least afford to pay it.” "Ironically, the very rich, the people who were supposed to be affected by the estate tax, were Does Sea Istor w Really Offer You * K More For Your $ Money? ! ★ Your Sealstor safes representative will be happy to discuss the economics of High Moisture Corn WE NOW HAVE ROSKAMP ROLLER MILLS IN STOCK. CALL FOR PRICES We will be at AG PROGRESS DAYS. AUGUST 25-26-27 With Our New Steel Roof and Dark Blue Structure. Stop by. say hello and register for our door prizes. PENN DUTCH FARM SYSTEMS, INC. 1730 Highway 72 North Lebanon, PA 17042 717-273-9324 ■I ■ ■ ■ ■ Please dipt Mail Coupon to ■■■■ 2 PENN DUTCH FARM SYSTEMS. INC. I 1730 Highway 72 North. Lebanon. Pa 17042 ■ (aminteraattdin PI Hi(h Moisture Corn ■ Storage □ Liquid Manure Storage ■ I —| Please add my name L- 1 to your mailing Hat I ■NAME ADDRESS | CITY STATE ■ TELEPHONE (including area code) NO. OF BEEF DAIRY to save farmers dollars able to avoid (paying) it through careful planning,” Jepsen said. So m effect we lud two estate taxes. A light one for the nch who can afford to plan ahead and a confiscatory one for everyone else an estate tax which forces the heirs to sell the farm or the business just to pay the bill, Jepsen reports. The Tax Act also changes social security benefits in that benefits can be received by the owner, and his property can still qualify for a reduced valuation tax break if he was active in the operation for 5 of the 8 years before the tune the benefits began. Also, major shifts in tax policy are stated m provisions reducing the tax rate on capital gams from 28 percent to 20 percent and on unearned income, from 70 percent to 50 percent. In a recently published booklet by Peat, Marwick, Mitchell and Co. the international accounting firm, the gift tax change is sum med up as so: “The most ' significant change m gift taxes is the increase in the annual gift tax LFB/15 □ HaylafeorCornSilate Storace pi Repladn* my oW or l_J brokan bottom unloader with the Laidlf □ ijWif 43 Jr Grain Conversion .HOGS. exclusion trom $3OOO to $lO,OOO. The gift tax is generally computed by applying the rate schedule to cumulative taxable transfers made during the donor’s lifetime and subtracting any gift taxes payable on previous gifts. The tax is then further reduced by a unified credit to the extent still available. The estate tax is an extension of the gift tax and is computed similarly and is changed as stated above. Under the 10-5-3 accelerated depreciation system, useful lives of equipment, buildings, property and machinery will be shortened for tax purposes. The changes in depreciation rules are retroactive to January 1, 1981. Any assets placed into service after 1980 will come under the new Act. MANURE PITS • Sewage Systems • Complete Excavating Service • Snow Removal THE “OPEN END” IVANY BLOCK ► Dynamic Masonry Contractors Gordonville MIKE FISHER & LARRY HERR The Yield Boosters: Agway certified quality seed treated until Vitavax*-200. Agway Winter Wheat and Barley certified quality seed comes treated with Vitavax -200 systemic fungicide to provide effective low-cost control of true loose smut.' In addition, Vitavax-200 protects your crop from covered smut, bunt, barley stripe, seed rot and seedling diseases Under normal growing conditions, ■ VUbHdngfor peopfe who worit the land ' Lancaster Fanatog, Saturday, August 15,19i1—A27 READ LANCASTER FARMING FOR COMPLETE AND UP-TO-DATE MARKET REPORTS SPECIAL FARM PRICES General-purpose buildings can now be written off m 15 years. Reagan’s new five-year plan covers large trucks, machinery including farm tractors,and one purpose agricultural buildings. These Styear assets qualify for a 10 percent investment credit. You can take 15 percent in the first year, 22 percent in the second and 21 percent in the remaining three years. Under the three-year category will fall highway tractors, light duty trucks, breeding animals and machinery and equipment used for development. The Washington Newsletter reports that through 1986, the tax cuts will amount to $732.9 billion, about equal to the entire present federal budget. 717-687-6801 FREE ESTIMATES this protection will promote better overall crop yield (in most cases four to five bushels more per acre). So see your local Agway store or representative for more information about Vitavax-200 treated seed —the yield boosters Vitavax is a Reg. T.M. of Uniroyal Chemical, a division of Uniroyal, Inc. FARM ENTERPRISE
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