American Farm Bureau Federation President Zippy Duvall says the organization objects to a proposal by several lawmakers to tax unrealized capital gains at death and roll back the stepped-up basis on those capital gains.
Duvall said, “Taxing capital gains when a loved one passes away would have a devastating impact on farm and ranch families.” Even more so, Duvall added, if the stepped-up basis tool is taken out of the toolbox.
Stepped-up basis encourages families to grow their businesses and pass them on to another generation, and elimination could force those families to sell their farms just to pay the taxes. The value of many farms is tied up in land and equipment. AFBF says cash flow on most farms is much too small to pay large capital gains taxes.
Farm Bureau says these taxes would cause further consolidation in agriculture, with small farms more likely to be forced out of business by the tax liability.
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