Months of hard work from farmers and ag interests across the nation to protect stepped-up basis appears to be paying off.
House democrats have been eyeing proposals within the 2022 budget that would have repealed stepped-up basis or put new capital gains taxes in place to help pay for a $3.5 trillion spending bill.
As of Monday, changes to those were not included in an outline published by the House Ways and Means Committee.
While that’s a good first step, the process is far from over, said Michigan Farm Bureau National Legislative Counsel John Kran.
“Michigan Farm Bureau and the American Farm Bureau Federation have always been front-and-center in the fight to save stepped-up basis and protect farmers from potentially devastating tax increases,” Kran said. “We will be watching this closely and working with Congress as this proposal continues to work through the House and Senate.”
The latest proposal also:
- Makes no changes to 1031 like-kind exchanges.
- Increases the top individual income tax rate to 39.6%.
- Increases the top capital gains rate from 20% to 25%.
- Raises the corporate tax rate from 21% to 26.5%.
- Amends Section 199A Small Business Deduction by setting the maximum allowable deduction at $500,000 for joint filers, $400,000 for individual returns, $250,000 for married filing separately, and $10,000 for an estate or trust.
Michigan Farm Bureau recently urged farmers and supporters of agriculture to tell Michigan’s Congressional delegation to oppose plans to change stepped-up basis. More than 800 supporters to date have answered MFB’s call to action, sending more than 2,500 messages to lawmakers and Agriculture Secretary Tom Vilsack.
“Farm Bureau members have made contacts to Congress that have made a difference, but the work must continue,” Kran said. “While we’re glad to see the plans removed from the recent tax proposals, we remain ready to protect stepped-up basis now, and in the future.”