Biden seeks repeal of longstanding tax-code provision that reduces estate-tax burden for family-owned assets - Entrepreneur Generations

President Biden's plan to finance infrastructure and increase spending on social programs includes repeal of a longstanding tax-code provision that allows heirs to avoid capital-gains taxes, and "Farm groups say elimination of the tax break would impose a burden on agriculture," Chuck Abbott reports for Successful Farming.

The issue is stepped-up basis. The term “means that when property passes to an heir, it is assessed at its current value, and taxed at that rate when it is sold, rather than the increase in value from when it was originally acquired by the family,” Abbott explains. Because of large exemptions, “Few farm families pay estate taxes but the 'death tax' is a perennial target of farm groups,” he notes. “There is an $11 million exemption per person from the estate tax, due to a provision in the 2017 tax cut law. The exemption will revert to $5 million in 2026.”

Biden's proposal is part of a tax plan that includes an increase in the capital-gains tax. Hans Nichols of Axios reports, “The White House thinks that change could lead more individuals to liquidate assets before they die, allowing the IRS to tax them then instead of encouraging families to keep passing on them for more favorable tax treatment.”

from The Rural Blog https://ift.tt/32OEsx9 Biden seeks repeal of longstanding tax-code provision that reduces estate-tax burden for family-owned assets - Entrepreneur Generations

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