The Problem:

If a deceased person does not have children or chooses to leave their assets to a non-lineal relation, this can create a scenario where the beneficiary does not have the liquid assets to pay the inheritance tax, potentially resulting in the sale of a small business or family farm. This is not the outcome tax policy should strive to achieve.

ITR Solution:

Completely eliminate Iowa's inheritance tax.

 

Work Left to Do:

Contact your legislators and let them know Iowa may be driving the final nail into the heart of the family farm or the family business via the inheritance tax.

Iowa Needs to Completely Eliminate the Inheritance Tax

The state may be driving the final nail into the heart of the family farm or the family business via the inheritance tax.

 

The inheritance tax, or death tax, is a tax on assets passed to a living person from a deceased person at the time of their death. Several years ago, the legislature removed the inheritance tax for lineal relations. Today, if a deceased person does not have children or chooses to leave their assets to a non-lineal relation, such as a niece or nephew, a business partner, or an employee, this is a taxable event. If the beneficiary does not have the liquid assets to pay an inheritance tax, the potential result is the sale of a small business or family farm just to pay the tax bill.

 

This is not the outcome tax policy should strive to achieve. The legislature should address this inequity in the tax code and allow the deceased to dictate the recipients of their assets without penalty.

Policy Solutions

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