Taxing family farms and their conservation contributions to death
By Dave Juday |September 28th, 2021
In April, President Biden unveiled his American Families Plan proposal, which included a devastating trifecta of changes to how capital gains are taxed, threatening one generation’s ability of being able to pass a farming operation on to the next. These changes would be crippling to American agriculture, and to the considerable conservation benefits its contributes to more than 900 million acres of land use in the U.S.
The Senate Finance Committee now is considering the President’s proposal in the form of the so-called Sensible Taxation and Equity Promotion (STEP) Act, drafted by Maryland Senator Chris Van Hollen, along with colleagues Bernie Sanders, Corey Booker, and Elizabeth Warren. The tax policy proposals in the plan amount to a short term – and short sighted – revenue raiser to pay for the massive $3.5 trillion American Families Plan that could do untold long-term damage to the U.S. agricultural economy and other small businesses.
First, the STEP Act would eliminate the stepped-up basis treatment for inherited assets. Under stepped-up basis, the value of an asset, like farmland, is adjusted to current fair market value at the time of inheritance. This prevents heirs from being subject to a tax liability on any appreciation of that asset which occurred before they came to own it.
https://www.cfact.org/2021/09/28/taxing-family-farms-and-their-conservation-contributions-to-death/?utm_source=rss&utm_medium=rss&utm_campaign=taxing-family-farms-and-their-conservation-contributions-to-death
