Biden抯 capital gains increase, lost step-up-basis worrisome for farmers & families
By Larry Lee, Brownfield
February 19, 2021
A farm tax and accounting expert says there is good reason to be concerned about President Biden抯 proposed tax law changes.?Neil Narveson with Compeer Financial tells Brownfield Biden抯 plan to raise capital gains taxes and eliminate what is called step-up-basis can get very expensive for property owners selling or transferring to the next generation. 揟his isn抰 just amongst farmers, it抯 amongst everybody. Let抯 say your parents have a house and it抯 not on the farm, it抯 just a house and they die and they pass it to you, that抯 going to get hit with not having stepped-up-basis just like everything else, so this is very concerning for many of our clients, especially those who have farms that could be passed on to the next generation in the coming years.?/p>
Narveson says the step-up-basis allows calculation of capital gains taxes from the fair market value at the time of transfer or sale, not the difference between the current value and the original purchase price many years ago.?He says that difference might make the taxes too high to pay. 揑t抯 possible that it could be enough to really bankrupt a lot of farmers out there if they don抰 have the cash sitting around to pay that tax on that transfer.?/p>
Narveson says the Biden administration promotes the tax changes as only affecting rich people, but he says it will affect most people...