| Orfarmer - 11/28/2022 08:41
That's why I say eliminate stepped up basis, 1031, and death tax and keep tax rates low. Original basis passes to heirs. If they cash in, they pay. If not, keep grandpappy's $200 basis. If you make a wise investment, pay a little tax when you decide to cash out. Don't put beginning farmers at a disadvantage thanks to uncle sam controlling your actions.
If you wanna keep the family farm in the family, keep on rolling without interference from uncle Sam or having him call the shots from the sideline. I hear what your saying, I truly do, and am torn myself sometimes, as I can see and understand both sides of the argument your making. The reason I’m strongly in favor of stepped up basis, is it’s without question the currently cheapest form of estate planning there is, combined with the currently very generous estate tax exemptions. Without question,the two best free tools in the box that keeps the family farm from having to be sold just to pay the taxes, for without these tax laws, the family would have to do extensive estate planning to come up with the necessary liquidity to pay the tax bill upon the demise of Mom and Dad. And those solutions don’t come on the cheap. All that being said, there’s no question in my mind these very favorable tax laws certainly help prop up the valuations of the family farm. So it’s a pick your poison kind of dilemma. My opinion is the laws on the books are of greater benefit to a family farm than the increased valuation is a detriment to it. Gotta run, busy day today, but have some more thoughts on taxation I’ll share when I get more time than I have right now.
Edited by Boone & Crockett 11/28/2022 13:02
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Land inflation and 1031 exchanges
