The federal estate tax was permanently enacted in the United States in 1916. The tax is applied to a deceased person's net estate before the estate assets are distributed to the heirs. During the first sixty years of its existence it remained relatively unchanged, but substantial evidence accumulated that the tax was having a detrimental effect on the nation's forest resources. As a result, specific provisions concerning forest land and timber were added to the federal estate tax law in 1976. These legislative amendments resulted from intense pressure for change that were centered on the premise that the old law no longer related to the current timber economy. Major statutory changes were also enacted in 1978 and 1981, and less substantive ones since that time. The timber provisions are intended to alleviate the burden of the estate tax on estates that contain forest land. The objective is to prevent the interruption of forest management programs and the premature liquidation of timber to pay the tax. The provisions are two fold in nature. The first allows forest properties to be specially valued based only on their timber growing potential rather than on potentially higher uses. The second permits the tax to be deferred for five years and then paid in instalments.
Key words: estate tax, timber, special use valuation, tax deferral.
Correspondence: William C. Siegel, Southern Forest Experiment Station, USDA Forest Service, 701 Loyola Avenue, New Orleans, Louisiana 70113, USA
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