ASA Chair warns family farms are especially vulnerable to potential tax changes

The chairman of the American Soybean Association suggests agriculture is especially vulnerable to potential changes to the estate tax.

Bill Gordon, who farms near Worthington in southwest Minnesota, tells Brownfield farming is asset-driven and often multi-generational.

“When mom and dad invested early, the land value wasn’t necessarily where it is today. And (we’ve) increased that value because of production and the need for agricultural products around the world. Now you start to see these estate values that are higher, but yet the cash isn’t there.”

President Biden’s American Families Plan includes elimination of stepped-up basis, which allows land and other investments to pass from one generation to the next without capital gains taxation at the time of death.

“If you get rid of that stepped-up basis (and) lower that estate planning number, now families are going to have to make a decision to sell part of the family operation to cover the taxes because the parents or grandparents had invested wisely. And that’s a struggle for American family farms right now.”

Biden’s proposal does exclude family-owned farms and businesses from capital gains if heirs continue to run the business.  Without that exclusion, Gordon says family farms and rural America will suffer.

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