Only about 6,800 estates that included farms or small businesses paid federal estate taxes in 2000, and the total might have been less than 700 if the current $1.5 million exemption amount had been in effect.[@@]
Officials at the Congressional Budget Office have presented those findings in a report on the effects of the federal estate tax on estates that include farms and small businesses.
Robert McClelland, a former CBO tax policy expert, wrote the report using figures and analyses prepared by other CBO staff members.
In 1999 and 2000, the tax years included in the study, “the vast majority of estates, including those of farms and small-business owners, had enough liquid assets to pay the estate taxes they owed,” McClelland writes in the estate tax report. “However, estates involving farms or small businesses were less likely than the average estate to have sufficient liquid assets to cover their estate taxes.”
In 2000, about 8% of the farm estates that owed estate taxes and 5% of the family-owned business estates that owed estate taxes appeared to have estate tax bills that exceeded their liquid assets, McClelland writes.