Ag Groups to Congress: Don’t Change Stepped-up Basis


The letter states federal tax policy should help facilitate the transfer of agricultural land to family-owned operations. “Because assets in agriculture are typically held by one owner for several decades, resetting the basis on the value of the land, buildings, and livestock on the date of the owner’s death under a step-up basis is important for surviving family members and business partners to ensure the future financial stability of the operation,” the letter states.

An exclusion from the capital-gains at death for agricultural operations “may be well-intentioned,” but “this obligation could still discourage the sale of farmland, depending on its implementation — potentially increasing the cost and further limiting the availability of farmland. Such unintended consequences could result in greater barriers to access for new, expanding, and underserved producers alike. As currently outlined, we remain opposed to repealing the step up in basis and to imposing new capital gains taxes on family farms and ranches when there is a death in the family.”

Farm groups also call for the continuation of the Section 199A business income deduction, which allows a 20% deduction for non-corporate taxpayers, as well as retaining Section 1031 like-kind exchanges on real estate.

Letter to lawmakers https://mcusercontent.com/…

Last week, a group of rural Democrats also wrote House leaders calling for specific language to exclude farmers and small businesses from any changes to inherited basis. https://www.dtnpf.com/…

DTN also looked recently at how tax code changes — including the change in the Section 199A — are shifting farmers out of C corporations: https://www.dtnpf.com/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN



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