Jacob Hart - ALC

Farms represent more than land and equipment. They hold generations of hard work, family history, and the foundation of American agriculture. But when a farm owner passes away, heirs can face staggering tax bills that force difficult decisions. Many families end up selling portions of the farm, taking on debt, or breaking up operations that stayed intact for decades. Family farms make up 95% of all operations in the United States. Federal estate tax hits estates valued above $13.99 million for individuals in 2025, or $27.98 million for married couples. The tax rate is 40% on amounts exceeding the exemption. That math can destroy a family farm overnight. Many heirs discover they owe hundreds of thousands of dollars within nine months of a parent's death. Without cash reserves, the only option is to sell land. The Basics of Farm Inheritance Taxes The federal estate tax hits estates valued above $13.99 million per person in 2025, or $27.98 million for married couples. Everything exceeding the exemption gets taxed at 40%. The estate includes all property owned at the time of death, including land, buildings, equipment, livestock, grain inventory, bank accounts, and retirement funds. When prime farmland sells for $10,000 to $20,000 per acre, a mid-size operation can easily exceed these limits. Good news arrived in July 2025. The One Big Beautiful Bill Act permanently increased the exemption to $15 million per person, effective January 1, 2026, with annual inflation adjustments to take effect thereafter. Married couples get $30 million. This gives farm families more breathing room, but estates above these amounts still face the 40% tax rate. Beyond federal estate taxes, farm families face two other tax types during succession. Gift taxes apply when you transfer property during your lifetime above the annual exclusion of $19,000 per person in 2025. Exceed that amount and you start eating into your lifetime exemption. Some states also impose their own inheritance or estate taxes separate from federal rules, with rates and exemptions varying widely. Strategies to Minimize Inheritance Tax on Farms   Strategy Potential Savings Biggest Catch Special Use Valuation Up to $1.39M reduction 10-year farming requirement Annual Gifting $19K per person yearly Lose step-up in basis Conservation Easement 40% exclusion, $500K cap Permanent development restriction Estate Tax Deferral Spread payments over 14 years Need 35% farm assets in the estate Life Insurance Tax-free death benefit Premium costs during life Annual Gifting Gets Assets Out of Your Estate The IRS lets you gift $19,000 per person per year in 2025 without counting against your lifetime exemption. Married couples can move $38,000 to each child annually. Run that for 20 years and you transfer $760,000 to one kid without touching your estate exemption. The gifts need to be complete transfers. You cannot gift land but keep farming it without paying rent. Section 2032A Slashes Land Values Farmland valued at $15,000 per acre for development might only be worth $8,000 per acre for farming. Section 2032A lets estates use the agricultural value instead of market value, capped at a $1.39 million reduction. Your heirs must keep farming the land for 10 years or the IRS claws the tax savings back. Basic requirements: Farm assets make up at least 50% of your total estate Real estate accounts for at least 25% of estate value You or family members farmed the land for 5 of the last 8 years Property passes to qualifying family members who continue farming Conservation Easements Lower Property Values Put a conservation easement on your land, and you permanently restrict future development. This tanks the property value for tax purposes. The IRS lets heirs exclude up to 40% of the easement value from estate taxes, maxing out at $500,000. A $2 million easement value reduction saves $800,000 in estate taxes. The easement stays with the land forever, even if it sells. Life Insurance Provides Tax-Free Liquidity Life insurance death benefits pass to heirs tax-free and provide immediate cash to pay estate taxes without selling land. An irrevocable life insurance trust keeps the policy proceeds outside your taxable estate. The heirs get cash within weeks instead of waiting months to liquidate farm assets. This works best when purchased years before death, while premiums stay reasonable. Family Limited Partnerships Move Ownership Gradually Set up an FLP and transfer the farm into it. You keep the general partnership interest and control everything. Gift limited partnership shares to your kids over time. Those limited shares get valued at 25% to 35% discounts because they lack control and cannot be easily sold. You move more wealth using less of your lifetime exemption. Trusts Remove Assets from Your Taxable Estate Irrevocable trusts take assets out of your estate completely. You lose control but the property passes according to trust terms without estate tax. Generation-skipping trusts bypass your kids entirely and go straight to grandkids, avoiding estate tax at the middle generation. Grantor Retained Annuity Trusts let you transfer appreciating assets while keeping income for a set period. These work best for families with estates well above exemption amounts. Section 6166 Buys Time to Pay Qualified farm estates can defer estate tax payments for up to 14 years under Section 6166. Farm assets must represent at least 35% of the total estate. You pay interest-only for five years, then principal and interest for nine more years. Interest rates stay low. This keeps heirs from having to dump land at auction to raise cash in nine months. Buy-Sell Agreements Lock in Values These contracts establish how farm ownership transfers if a partner dies or wants out. The agreement sets the purchase price ahead of time, which can establish the estate tax value. This prevents fights between farming and non-farming heirs about buyouts. The agreement needs funding through life insurance or installment payments to work properly. How These Strategies Play Out A grain operation in Illinois worth $18 million passes to three kids in 2025. No planning means a $1.6 million federal tax bill. The parents use special use valuation for a $1.39 million reduction. They gifted $500,000 in land over 15 years. Add the marital exemption and spousal portability, and the estate pays zero federal tax. A ranch in Nebraska faces a 13% state inheritance tax for the son taking over. The parents donated a conservation easement on 500 acres, dropping land value by 30%. The estate value falls below the state taxable threshold. The family avoids over $200,000 in Nebraska inheritance tax. An Iowa family plans 10 years out. They form an LLC holding the farmland and gift 5% of the LLC shares annually to their daughter. Lack of control discounts means each 5% gift only counts as 3.25% against their exemption. After 10 years, they transferred 50% ownership while only using 32.5% of their gift exemption. Mistakes That Cost Farm Families Waiting Until It Is Too Late These strategies take years to work. Starting planning at age 75 or after a health scare leaves almost no options. Begin 10 to 20 years before you plan to retire. Gifting Too Much Land During Life Property inherited at death gets a step-up in basis to current market value. Capital gains disappear. Gift land during life and your kids inherit your original low basis. They might pay more in capital gains tax than you saved in estate tax. This trade-off requires professional analysis. Using Your Cousin to Value the Farm The IRS disputes farm valuations constantly. Hire a qualified rural appraiser who knows comparable sales and can defend the numbers. Family members guessing at land values brings IRS audits and penalties. No Cash to Pay the Tax Bill Estate taxes come due in nine months. Farms do not produce that kind of cash quickly. Without life insurance, savings, or access to Section 6166 deferral, families sell land. That defeats the whole point of keeping the farm together. Keeping Succession Plans Secret Kids who find out their inheritance plans at the funeral lawyer meeting fight each other in court. Some want to farm. Others want cash. Parents who never discuss plans leave messes that burn through estate value in legal fees and destroy family relationships. How High Point Land Company Helps Farm Families High Point Land Company works with families who own farmland in the Midwest on succession planning and keeping operations intact across generations. Our team has seen what works and what creates expensive problems down the road. Professional land appraisals that meet IRS requirements and hold up under scrutiny. Farm management services keep land productive during ownership transitions. Coordination with estate attorneys and CPAs on transfers, LLCs, and tax planning. Marketing farms for sale when partial sales become necessary. Live auctions, sealed bids, and traditional listings are customized to each property. Action Steps to Take Right Now Pull out your will and trust documents. If they have not been reviewed in five years, schedule a meeting with an estate attorney who handles agricultural property. List every farm asset, including land, equipment, grain inventory, livestock, and any mineral rights. Get current land values from a qualified appraiser, not a guess from the coffee shop. Calculate your total estate value and compare it to the exemption thresholds. With exemptions rising to $15 million per person in 2026, many farms will fall below the taxable threshold. But land values keep climbing, and what looks safe today might not be in 10 or 20 years. The strategies outlined here take time to implement, so starting early gives you maximum flexibility. Schedule a family meeting and talk openly about who wants to farm and who wants out. Each person knowing where they stand prevents fights later. Look at the strategies outlined here and decide which combinations fit your situation. Contact High Point Land Company for professional appraisals, farm management help, or guidance on selling the land options that preserve wealth while meeting liquidity needs. References IRS - Estate Tax USDA Economic Research Service - Federal Estate Taxes One Big Beautiful Bill Act Estate Tax Updates (2025) USDA NASS - Family Farm Statistics Section 2032A Special Use Valuation (Moss Adams)

High Point Land Company / Full-Time / Hybrid – In Office and Remote $50,000 to $75,000 Base Salary with substantial performance bonus with no cap. *Base salary depends on sales, negotiation, agriculture, real estate experience. Are you experienced in agriculture and ready to take your sales career to the next level? High Point Land Company is seeking a driven, relationship-focused Outside Real Estate Agent – Land Sales Specialist to join our growing team. This role is ideal for individuals with a background in ag lending, equipment sales, or other agriculture-related industries who are ready to transition into high-level land real estate sales.   What You’ll Do: Work directly with sales teams and office staff to close deals and leads. Negotiate contracts with landowners, including buyers, sellers, and investors Build lasting relationships within the ag and rural community to generate new business Represent our brand and values with professionalism and integrity Provide exceptional customer service throughout every step of the transaction Collaborate with a strong internal team to ensure clients receive a smooth, successful experience Focus on land transactions (not residential homes unless they include rural acreage) Great organizational skills to maintain CRM additions Tech savvy and able to utilize tools and software for land real estate sales. What We’re Looking For: Proven background in agriculture (ag lending, agronomy, seed/fertilizer/equipment sales, etc.) Strong communication, negotiation, and relationship-building skills Excellent customer service and a team-player mentality Highly self-motivated and performance-driven Iowa Real Estate License or the ability to obtain one (required) Willingness to work hard, follow a proven system, and consistently close deals Why High Point: Company truck provided Base salary with substantial performance bonus Paid vacation Direct training from our CEO/Founder, COO, and Sales Teams with over $1 billion in sales experience Proven system with warm lead handoffs – your inside team is already working hard to set you up for success Real opportunity to earn well over six figures   At High Point Land Company, we don’t just sell land – we’re building lasting partnerships and delivering the best land transaction experience our clients have ever had. If you have a strong foundation in agriculture and a passion for helping others, we want to talk with you. To apply, email your resume to employment@highpointlandcompany.com or apply HERE. For more job opportunities, visit our Careers page.

Soil fertility drives everything in agriculture. Without it, even the best farming practices fall short. Good soil produces healthy crops year after year, while poor soil creates endless challenges for farmers and landowners. This fundamental truth affects everyone from small-scale growers to investors looking at Land For Sale across the country. The importance of soil in fertility goes beyond just growing crops. It determines how much money a farm can generate, affects property values, and influences long-term sustainability. Fertile soil creates opportunities, while depleted soil creates problems that compound over time. Farmers who understand this relationship make better decisions about their land management and investment strategies. Soil Organic Matter and Crop Productivity Soil organic matter serves as the foundation for productive farmland. This decomposed plant and animal material creates a living system that feeds crops, holds water, and supports beneficial microorganisms. When organic matter levels run high, soil becomes a nutrient reservoir that plants can access throughout the growing season. The humus component of organic matter acts like tiny sponges, holding onto water and nutrients that might otherwise wash away during heavy rains. Organic matter does more than just provide nutrients. It builds soil structure, making it easier for roots to penetrate and grow. This improved structure also helps water infiltrate instead of running off, reducing erosion and making the most of natural rainfall. The biological activity that organic matter supports creates natural pest control and disease suppression, reducing the need for expensive chemical inputs. Benefits of higher organic matter content include: Better water retention during dry periods reduces irrigation needs. Improved nutrient holding capacity, making fertilizer applications more effective. Enhanced soil structure that prevents compaction and erosion. Increased biological activity that cycles nutrients naturally. Greater resilience during weather extremes like droughts or excessive rainfall. Plant Nutrients for Fertile Soil Plants need specific nutrients in the right amounts to reach their full potential. Understanding these nutrients helps farmers and landowners make informed decisions about soil management and fertilizer applications. Macronutrients: Nitrogen (N): Powers leaf growth and protein production in plants. Corn and other grain crops need large amounts during their rapid growth phases. Phosphorus (P): Drives root development and seed formation. Young plants especially depend on adequate phosphorus for establishing strong root systems. Potassium (K): Strengthens plants against disease and helps regulate water use. Crops with good potassium levels handle stress better and produce higher-quality grain. Calcium (Ca): Builds cell walls and supports root health. Also helps maintain proper soil pH for nutrient availability. Magnesium (Mg): Forms the center of chlorophyll molecules, making photosynthesis possible. Without enough magnesium, plants cannot capture sunlight effectively. Sulfur (S): Creates amino acids and proteins within plants. Often overlooked but increasingly important as other sulfur sources decline. Micronutrients: Iron, Zinc, Copper, Boron, Manganese, Molybdenum, and Chlorine: Needed in small amounts, but deficiencies can devastate crop yields. These nutrients often become unavailable when soil pH gets too high or too low. Soil pH and Fertility Balance Soil pH controls how well plants can access nutrients, even when plenty of nutrients exist in the soil. Most crops thrive when soil pH stays between 6.0 and 7.0, but some plants prefer slightly different ranges. Corn performs best around 6.8, while soybeans can handle slightly more alkaline conditions up to 7.2. Wheat adapts to a wider range but produces optimal yields between 6.0 and 7.5. Problems develop when pH moves outside the ideal range. Acidic soils with a pH below 5.5 can release toxic levels of aluminum, which damages plant roots and prevents proper nutrient uptake. These soils also lock up phosphorus, making it unavailable to plants even when soil tests show adequate levels. Alkaline soils above pH 7.5 create different problems, particularly iron deficiency that shows up as yellowing leaves despite adequate iron in the soil. Cation Exchange Capacity and Nutrient Retention Cation exchange capacity measures how well soil can hold onto plant nutrients. Think of CEC as the soil's storage capacity for important nutrients like calcium, magnesium, and potassium. Soils with higher CEC values retain nutrients better and require fewer fertilizer applications because nutrients stay in the root zone instead of washing away. Clay soils naturally have higher CEC values than sandy soils, but organic matter makes the biggest difference. Adding organic matter to sandy soils can dramatically improve their nutrient-holding ability. This is why sandy soils often need multiple fertilizer applications during the growing season, while clay soils can get by with less frequent applications. High CEC soils offer several advantages: Nutrients stay available to plants throughout the growing season. Fertilizer applications remain effective longer, reducing input costs. Less risk of nutrient pollution in groundwater and streams. Better buffering capacity against pH changes. More stable soil fertility levels year to year. Testing and Monitoring Soil Fertility Regular soil testing provides the roadmap for making smart fertility decisions. A comprehensive soil test reveals not just nutrient levels, but also pH, organic matter content, and cation exchange capacity. This information guides fertilizer choices and application rates, preventing both deficiencies and expensive over-application. Testing every three to four years helps track changes and adjust management practices accordingly. Fields with a history of low phosphorus might show stunted root development and poor early-season growth, problems that soil testing can identify before they impact yields. The investment in testing pays for itself by preventing yield losses and avoiding unnecessary fertilizer costs. Practices to Improve Soil Fertility Building soil fertility requires consistent effort over multiple years, but the results justify the investment. These practices work together to create healthy, productive soils: Adding organic matter through compost, cover crops, and well-aged manure improves soil structure and nutrient cycling. Implementing crop rotation breaks disease cycles and allows different crops to contribute unique benefits to soil health. Reducing tillage preserves soil structure and protects organic matter from rapid decomposition. Installing conservation practices like buffer strips and cover crops prevents nutrient loss from wind and water erosion. Using precision application methods applies fertilizers only where and when needed, reducing waste and environmental impact. Soil Fertility and Long-Term Farmland Value Fertile soils drive higher farmland values because they produce better returns for farmers and investors. Farmland for sale across the Midwest commands premium prices when properties show proven soil fertility and good test results. Poor fertility limits buyer interest and reduces property values since depleted soils need significant investment to become productive. Properties with healthy soils also support better wildlife habitat and food plots, making them more appealing to recreational buyers. High Point Land Company helps clients understand how soil fertility affects property values, working with buyers and sellers to evaluate this important component of agricultural real estate.