IARN — An American Farm Bureau member says the elimination of stepped-up basis could hurt farmers’ and ranchers’ ability to pass their farm to the next generation.
Recent proposals from Congress to eliminate stepped-up basis would have devastating impacts to producers, says 4th generation farmer Mike Brundige. He explains that scrapping the important tax provision would prevent him from passing on his farm to the 5th generation.
“Our main goal is to keep the land in the family,” said Brundige. “Elimination of stepped-up basis would certainly lower the amount of our assets that we are able to pass on to our children. There’s no reason in having them accountable for taxes that accrued on it for forty or fifty years before.”
Brundige says more people will be impacted by the elimination of stepped-up basis than many realize, especially in agriculture where most farmers own land but don’t have the money to pay increased taxes.
“When you get into these questions about taxing any kind of wealth, especially at death, in my opinion it doesn’t matter where the rates are, there should be no tax applied anyways because that has all been taxed before,” he said. “People think of it just being for people that are ultra-wealthy, but it’s not. It’s going to be a lot of just everyday people that maybe aren’t expecting it.”
Brundige says the current tax laws allow farmers to grow their business with the goal of passing the farm to the next generation.
“Especially since the 2017 tax revisions, we’re in really, pretty good shape,” said Brundige. “And not just farmers but I think most small business people. So, I feel good about like it is right now and really wish they would just sit tight and see how it works out. Our goal was to keep the land in the family and that won’t work if you have to start selling off parcels of it.”
For more information on stepped-up basis concerns, visit fb.org.
Story courtesy of NAFB via the Iowa Agribusiness Radio Network
Photo of Mike Brundige (left) is courtesy of American Farm Bureau
