Chuck's Chat-Welcome to September!
Gonna take a little detour this month to pass along some information I received today from Kansas Farm Bureau.
Ask Congress to protect stepped-up basis
We're asking members to reach out to their members of Congress and ask them to protect stepped-up basis even if you contacted them earlier this year on the same issue.
Why?
Congress is moving forward with a $3.5 trillion fiscal year 2022 budget resolution.
The spending in the legislation resulting from the reconciliation language in the budget resolution will need to be offset by some combination of federal spending reductions, additional deficit spending and tax increases. The potential tax increases include an increased corporate tax rate, the elimination of stepped-up basis and imposition of capital gains at death.
This would be devastating to American agriculture. And why we need you to take action now!
Many farmers and ranchers pass assets such as land from generation to generation, keeping those assets in the family for decades. Stepped-up basis allows a farmer to pay capital gains taxes only on a property’s increase in value since the time he or she inherited that property. Without stepped-up basis, a farmer would have to pay the full increase in value since the property was purchased by a deceased relative, potentially several decades ago.
In addition, the tax on the new stepped-up value is deferred until property is sold by the surviving family member.
Imposing this massive new tax could put families out of business.
Hardworking families who have spent a lifetime building businesses, creating jobs and keeping our pantries stocked should not bear the brunt of funding the government.
Farms are often kept in the family for many generations. Tracking the appreciation of land and equipment over decades would be extremely complex, and the value of land is likely to have increased so much that without stepped-up basis the next generation of farmers and ranchers could be forced to sell the land just to pay the taxes.
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Until next month,
Chuck Voelker