Scary changes in US Tax law being proposed by Biden. Retail small business has been slaughtered, is the plan to destroy multi generational farms next? If you watch ice age farmer or track UN Agenda 2030 the answer is an obvious yes. Plus, someone is going to have to pay for the massive debt being accumulated. I am up in Canada but have been telling my family the time for planning is now.
Biden Farm Death Tax
Lonesome lands article
Capital gains tax on estates. First, a lesson on stepped-up basis. Stepped-up basis means if you bought land for $400,000 several years ago and it’s worth $2 million when you die, the basis when your kids get it is moved up to the value on the date of your death — so $2 million. That means nobody pays capital gains tax on it, even if a farming heir buys from nonfarming heirs. Stepped-up basis saves your heirs a ton in capital gains tax.
Let’s say you have $1 million worth of equipment and you’ve taken depreciation on it. Currently, your heir can re-depreciate that equipment, if you’ve planned carefully.
Biden has two features in his plan, and one is unfortunate, but the other is disastrous for farmers.
The unfortunate one is that he wants to eliminate stepped-up basis. That means the $400,000 in land that’s now worth $2 million can go to your kids, and so long as they don’t sell, it doesn’t hurt them. If they do sell, they’ll pay taxes. Plus, equipment inheritance can’t be re-depreciated.
The disastrous option, if we’re all interpreting this correctly, is that he would tax built-in gain through appreciation. So that $2 million in land would be taxed on your death as if it were being sold, and so would the equipment, even if it was depreciated to zero. The capital gains tax proposal would raise it to 39.6%, which means the tax on $2 million of land and $1 million of equipment would be around $1 million.
That would be a pretty devastating change for farmers, if Congress went along with it.
Biden Farm Death Tax
Lonesome lands article
— GEORGE WASHINGTON“The great searcher of human hearts is my witness, that I have no wish, which aspires beyond the humble and happy lot of living and dying a private citizen on my own farm.”