Farm or Fortune? The Role of Heirs’ Intentions and Tax Policies in Farmland Succession Planning
Under Review, 2025
Abstract
Farm succession receives increasingly more national attention due to rising land prices and changes in tax policies. I provide a systematic evaluation of changes in capital gains and estate taxation policies influencing farmland owners’ optimal selling behavior. The policy analysis provides two novel contributions: first, allowing heirs to keep or sell the farm upon inheritance, and second, analyzing five realistic policy scenarios including the proposed American Families Plan (2021) and adopted One Big Beautiful Bill Act. The results show that the heirs’ intentions to keep the farm exacerbates the ``lock in’’ effect across policy scenarios, contributing to reduced farmland sales.
Hinds, A. 2025. "Farm or Fortune? The Role of Heirs’ Intentions and Tax Policies in Farmland Succession Planning." [Draft Available Upon Request.]