CCFB News» October 2024

The Family Farm Preservation Act (FPPA) n makes the following changes for estates that are ‘eligible’ for the IRS agricultural Special Use Valuation Rule (regardless of if the estate actually claims the federal rule or not):

• Changes the current Illinois $4 million dollar threshold in three ways: increases it to $6 million. Make it an actual exemption, not a threshold. Only dollars over $6 million will be taxed, as opposed to the current law where the entire estate is taxed if the $4 million threshold is breached. Ties the $6 million exemption to inflation.
• Allows any unused exemption amounts to be transferred to the surviving spouse, thus ensuring the doubling of the exemption amount for a family to $12 million plus inflation.
• Updates the agricultural special-use valuation, for Illinois Estate Tax purposes, to reflect modern farm estates and farm family descendants.

These changes are limited to farms only.

The Agricultural Special Use Valuation Rule (2032a) is a tool to help farm families preserve their businesses by allowing family business owners to manage their estate tax liability. A brief summary of the rule unchanged at this time by the FFA provides that the provision allows farmers to pay estate taxes on the value of farmland based on agricultural use, rather than what it would be worth if it were sold for development. To be eligible for the rule, an estate must follow these conditions:

• The farm operation must make of 50% of the value of the estate.
• At least 25% of the estates value has to be the land (including improvements) which had to have been used for farming by the decedent or family member for 5 of the previous 8 years before the decedent’s death.
• The heir must continue to farm for 10 years.

Farm Bureau, along with our sponsors and allies of the Family Farm Preservation Act, are continuing to pursue passage. The FFPA has strong bi-partisan support. We believe there is a path to eventual passage, but we must keep pushing the issue with our legislators, communicating how

much of need there is for the FFPA.

We appreciate the following Cook County legislators’ willingness to sponsor the FFPA:

Representatives Anthony DeLuca, Angelica Guerrero-Cuellar, Martin Moylan, Michelle Mussman, and Abdelnasser Rashid and Senators Cristina Castro, Lakeshia Collins, Napoleon Harris III, Mattie Hunter, Patrick Joyce, Julie Morrison, and Mike Porfirio.