Attorney fears fallout from loss of stepped-up basis
An ag law expert said the removal of the stepped-up basis could be ‘devastating’ for farmers.
Attorney Connie Haden based in Columbia, Missouri tells Brownfield removing the stepped-up basis would force one of two actions from many farmers…
“If we have some time to react, a lot of land will change hands or, if it goes into effect and we don’t have time to react, the worst-case scenario is that we have to pay tax on that capital gains tax at death then a lot of land may have to be sold to actually fund that tax bill,” she said.
She said while farmers’ primary focus should be on stepped-up basis, but possible changes to the estate tax are concerning. Haden says whether the Biden administration makes changes to the estate tax or not, the exemption amount is set to fall from nearly $12 million to about $6 million at the end of 2025 which would harm farmers.
“I know that the federal government is trying to find money wherever they can with all the money that’s going out the door, but it’s going to wreak havoc on so many small farms that it’s hard to watch,” Haden said.
She said farmers might want to make wanted changes to their estate plan’s soon to take advantage of the higher estate tax exemption.
Haden presented at Missouri Farm Bureau’s Commodity Conference in Jefferson City, Missouri Friday.