Senate Approves Plan To Keep Stepped-Up Basis

As part of the recently approved $3.5 trillion “human infrastructure” bill, the Senate agreed to preserve stepped-up basis, which many in the farming community say is critical to ensure farms can be passed down to the next generation. South Dakota Republican John Thune proposed an amendment to keep stepped-up basis and it received a 99-0 vote.

The amendment also prevents a Biden Administration-proposed capital gains tax at death. Thune strongly opposed a competing Democratic amendment he compared to the administration proposal.

“The administration suggested it might include arbitrary exemptions to this ill-advised idea, which I think is what the Cortez-Masto amendment speaks to, these so-called protections for family-owned operations, would not provide sustained relief, and, in practice, would be incredibly difficult to implement, he reason they didn’t do it in the 1970s—we have never taxed unrealized gains in this country.”

The competing rider by Nevada’s Catherine Cortez Masto was rejected 49-50, while a different change by Louisiana Republican John Kennedy to keep an exclusion for like-kind farmland exchanges prevailed by voice-vote.

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