Legal Question in Tax Law in Wisconsin

Re: life insurance

Your question is a bit vague: does the partnership own the farming business, as well as some land? What is the nature of the farming business? Are animals raised? Crops? A combination?

Presuming the surviving spouse is relinquishing all interest in the farm partnership, it would appear to be a cross sale to the surviving partner. (Note: this also could have been set up to do a redemption by the partnership.) The surviving spouse will have to report the income recieved for the sale. This will most likely be done on the income tax return of the estate of the late husband. However, the basis for the asset being sold will most likely be the price of the sale, since that asset should get a step up in basis upon the death. This becomes a bit more complex in Wisconsin, since Wisconsin has marital property, and it may depend upon whether the farm partnership is marital property. As you can probably gather, this is all quite complex and you would be well served to have adequate legal and tax advice when such planning is contemplated. Best of luck!