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The Midwest Cattleman · August 19, 2021 · P15
      over  $400,000  in  taxable  in-      “As you will recall, a propos- make it much more difficult, or  duced by Democrats to elimi-
      come annually from 37 percent  al to reach a similar outcome by  even impossible, for parents to  nate stepped-up basis, 92 of the
      to 39.6 percent.                   requiring an heir to ‘carry-over’  pass on their farm or ranch to  94 representative farms would
      Devastating effect                 the decedent’s tax basis was  their children.  This is a criti- carry tax liability averaging
         Sen. John Thune (R-SD), the     tried before in 1976—and failed  cal tool for  America’s farmers  $726,104 per farm.
      Senate minority whip, led a let-   so spectacularly it never came  and ranchers, and we urge all           Under another bill that
      ter released July 21 signed by     into effect. It was postponed in  members of Congress to oppose  would roll back estate-tax ex-
                                         1978 and repealed in 1980.”
                                                                            efforts to eliminate it.”
      every Senate Republican call-         Thune’s news release in-                                          emptions to $3.5 million for an
      ing on Biden to drop the capi-                                          Republicans point to a study  individual or $7 million a cou-
      tal-gains increase, arguing it     cluded a quote from Zippy Du- released by Texas A&M’s Agri- ple—combined  with  dropping
      “would have a devastating ef-      vall,  president  of  the  Ameri- cultural and Food Policy Cen- the stepped-up basis—the tax
      fect on multi-generation” busi-    can Farm Bureau Federation.  ter in June, citing that just two  liability goes to about $2.17
      nesses, farms and ranches.         “Passing on the family farm  of 94 representative farmers  million per farm.
                                         to the next generation is a top  are affected by current tax pol-
         The GOP senators wrote,                                                                              WLJ
      “These     businesses     consist  priority for many farmers and  icy that exempts $11.7 million
                                         ranchers,” Duvall said. “Elimi- in  assets  for  individual  heirs
      largely of illiquid assets that    nating stepped-up basis and in- in an estate, or $23.4 million
      will in many cases need to be      creasing capital gains taxes will  per couple. Under a bill intro-
      sold or leveraged in order to
      pay the new tax burden. Mak-
      ing these changes could force
      business operators to sell prop-
      erty, lay off employees, or close      WHY ARE WE STILL HERE AFTER MORE THAN 25 YEARS?
      their doors just to cover these
      new tax obligations.
         “The complexity and admin-
      istrative difficulty of tracking
      basis over multiple generations
      and of valuing assets that are
      not up for sale will lead to colos-
      sal  implementation  problems
      and could also lead to huge tax
      bills that do not accurately re-
      flect any gains that might have
      accumulated over time.

                                                               MAKE SURE YOU ARE                                    September 10, 2020   Volume 26  No. 8

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                                                                   SEPTEMBER 9TH                                               Charolais
                                                                                                                                Page 18
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