Wood does not yet have a family member ready to inherit Eildon Tweed Farm. If a long-time employee, per se, were to take over his farm when he retires, federal tax policies do not include exclusions for anyone other than direct family members. Therefore, his successor could potentially have to sell the farm just to foot the federal tax bill.
“It is quite an undertaking, but we are hoping to make provisions,” said Wood, about having a family member inherit the farm in the coming years.
After 2025, the estate tax will increase to 40 percent for property valued above $6 million, which includes Eildon Tweed Farm. Additionally, President Biden is proposing to increase capital gains tax to 39.5 percent. Wood’s successor, if not a family member, would have to pay millions in taxes and the farm would not be able to make a profit.
When Wood moved into the farmhouse in 1970, Eildon Tweed Farm was operating with 60 acres. In 2021, it now operates on 3,500 acres and is valued at $12 million.
“The farm has different types of assets,” said Wood. “Real estate, machinery, etc., add value, but they are not fluid and not spendable.”
Undeveloped land in Saratoga County, such as the farmland at Eildon Tweed Farm, has been rapidly increasing in worth. Between offers from developers and high taxes, local farms are slowly disappearing.
However, the New York Farm Bureau is working on behalf of farmers like Wood. See the following passage from the New York Farm Bureau 2018 Policy Book: “Estate taxes continue to be of concern to farmers as they impact their ability to pass the farm on to the next generation or to another farmer. Current laws need modification in order to assure the continuance of New York agriculture.”