President Biden’s nominee for Treasury’s tax policy chief got asked this week about the Administration’s proposal to end the stepped-up basis on family farms and replace it with a capital gains transfer tax.

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“In terms of the treatment of family farms and businesses, as I understand it, reading the proposal, it would delay any tax due for any family farms and businesses until it was no longer owned and operated by the family,” Lily Lawrence Batchelder recently said before the Senate Finance Committee.

Lawrence Batchelder conceded those earlier proposals to replace stepped-up basis with carry-over basis were repealed but claimed one in 2010 did not have any major problems. Still, Republican Senator Chuck Grassley argued the President’s plan could still pose problems determining basis after the long-time owner, and decision maker of a family farm passes away.

“There are some precedents for this kind of provision that I worked on back in my time with Chairman Baucus, former Chairman Baucus," Lawrence Batchelder said. "But I would be eager to work with you and your staff, if confirmed, to make sure that that was drafted in a way that was workable and technically sound.” 

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