Special Estate Tax Provisions for Farmers Should Be Simplified To Achieve Fair Distribution of Benefits

GAO examined two provisions added to the Federal estate tax law by the Tax Reform Act of 1976 to help farm families retain farmland after the death of the owner. The provisions are, specifically, special use valuation and deferred and installment payment. The purpose of the review was to determine whether the provisions have been effective in promoting the stated congressional objective of reducing the number of family farms sold to pay estate taxes. The evaluation was conducted prior to enactment of the Economic Recovery Tax Act (ERTA) of 1981.