Impacts of Federal Estate Taxation on Investments in Forestry: Comment/Reply

In a recent article by Sutherland and Tedder a list of specific problems of forest landowners relating to estate taxes was presented. The list included: 1. unexpectedly high estate taxes due following death, and 2. lack of liquidity for funding estate taxes, which may result in untimely sale of timber. Prindle reviews the procedures for extending the period of time for payment of federal estate taxes by the payment election and evaluates life insurance purchase and borrowing from lending institutions as alternative means of funding estate taxes due. Prindle indicates that Sutherland and Tedder have effectively ignored the first option. Sutherland and Tedder reply that they also recommended that the estate-tax payer should, in effect, borrow from the federal government through a deferment of the tax under Section 6166. They suggest that Prindle's analysis needs to be expanded to properly analyze the problem.