| Distance Runner - 8/20/2024 11:54
Not gonna lie, I have benefited big big big from stepped up basis. Land originally purchased in the 1930s and 40s for well under $100 an acre, now worth 100x that. It's arguably the biggest factor in why I am relatively wealthy. Luck of birth, really.
Of course, I look around my county, and see a large percentage of land held essentially in perpetuity by out-of-state landlords, the great great grandchildren of the original purchasers. They are three generations removed from the farm, and couldn't find their land if you drew them a map. Land is very rarely sold, after all why would they if it comes tax-free and will generate rent for the rest of their lives? And their children's lives. And their yet to be born grandchildren... this trend is not our friend. It's not good for farmers trying to obtain land, and not good for small towns as these out of state owners contribute nothing to the local economy.
Somewhere there needs to be a compromise. Stepped up basis of some kind for farmer-operators? Yes, I think that is a social good, assuming we want to preserve small farmers (and I sure do). Stepped up basis for what are essentially an investor class? I'm less enthused, as there is a clear social cost. I pay a lot of attention to these proposals, one of my jobs demands it. The proposals I’ve previously seen touted by Biden would exempt working family farms with a defined direct descendent in line to take over the operation, for a determined timeframe type of deal. The nasty proposals I’ve seen are to esentially double the cap gains rate to 39.6%,(plus add in an additional 3.6% Medicare tax) so farms that are sold will owe a bunch of tax. In my mind, that’s a heck of an incentive to not sell. Unless of course they implement the unrealized gain provision that has also been tossed around. That would essentially force a sale to pay the tax.
Edited by Boone & Crockett 8/21/2024 07:24
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Elimination of stepped up basis
