Congress looks at tax changes

Sep 17, 2021  | 2 min  | Ep4705

If death and taxes are inevitable - combining the two is a constant concern for those actively engaged in farming and planning for the next chapter in the family farm. 

This week, Congress proceeded with a tax plan as farmers and ranchers held their collective breaths on the transfer tax and step-up in basis language of the plan.

Peter Tubbs has more.

Democrats have reportedly abandoned attempts to change the tax laws that remove most of the tax burden on inherited farmland. 

This week, the House Ways and Means Committee advanced a tax package that would change how estate taxes on farm and ranch inheritances are calculated. If adopted, the measure preserves step-up basis for those inheriting agricultural land and relieves heirs of a heavy tax burden for capital gains. 
Advocates of step-up basis argue that ending the scheme would make land inheritance prohibitively expensive for heirs, and in some cases would require sale of some property to generate income to pay taxes owed.
Democrats had pushed for the changes as a means of targeting large inheritances consisting of stocks and real estate, but concerns over the effect on the agricultural community ended the plan.
If passed, the measure would cut the $11.7 million dollar exemption of estate and gift taxes to $5.85 million dollars starting on January 1, 2022. Also, the tax rate on capital gains on stock or real estate sales for some households would go up and corporate tax rates would be broken into three new brackets. 
Tax consultants are advising that farm operators should consult with their tax professional before the end of the year.
For Market to Market, I’m Peter Tubbs.
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