DODGING THE TAX BULLET: THE USE OF FOREIGN LIMITED LIABILITY COMPANIES BY RETIRED FARMERS TO LIMIT STATE INHERITANCE TAX LIABILITY FOR THE NEXT GENERATION OF SMALL FARMERS

摘要

Given the scope of and readership base of this law journal, we will assume that a large majority of the readers of this Note are legally trained and educated. For the duel purposes of making a point and keeping most of the readers at ease, the following is an example of a law school short answer hypothetical that might be seen on a typical Estate and Gift Tax final exam. Early in his life, Farmer Jones ("Farmer") had purchased a small farm in Eastern Nebraska. Over the years, Farmer had been very successful and had bought an increasing amount of land as other smaller farmers were forced out of business. At the time of his retirement his farming operation had an assessed value of $800,000. When Farmer retired he rented the farm to Son, promising hisonly child that the farm would go to him when Farmer and his wife had passed away. Once his Son began managing operations on his own, Farmer and his wife decided to purchase a home in Arizona after many of their prior neighbors convinced them of the benefits of being "snow birds"1 during the cold Nebraska months. As a result they lived in Arizona during much of the fall, winter, and spring, only visiting Nebraska for about four months out of the year. During his parents' retirement Son saw the value ofthe farm increase significantly due to national interest in bio-fuels. A year ago Son's mother passed away, but Farmer continued to reside in Arizona with many of the friends he developed while living there.