Ohio Farm Bureau supports Issue 1
The ballot initiative asks Ohio voters if the state should strengthen the petition process and raise the threshold to 60% for approving constitutional amendment proposals.
Read MoreBy Robert Moore, Wright & Moore Law Co., LPA
The 2020 November election did not end up being a total victory for either the Democrats nor Republicans. The Senate remains in play until the special election in January but seems more likely than not to remain in Republican control. With that in mind, what can we expect for next few years?
We do not anticipate sweeping changes to the tax code. This may have occurred if the Democrats would have won a clear majority in the Senate. As things stand, the Biden administration may implement some smaller tax changes through implementing regulations, but big changes like the estate tax exemption are unlikely to occur.
The current federal estate tax exemption is $11.2 million per person. In 2026, the exemption reverts to the pre-2017 tax bill of around $5.5 million per person unless extended by Congress. A lot of things can happen and will happen with Congress before 2026, but you should assume that the tax exemption will be the smaller amount beginning in 2026. So, it is prudent to base your planning on a $5.5 million estate tax exemption rather than the current $11.2 million exemption.
One change a Biden administration could possibly implement is a loss of stepped-up tax basis at death. The loss of a stepped-up basis was a primary tax change initiative of the Biden campaign. Currently at death, all assets receive a stepped-up tax basis and can be re-depreciated or sold without capital gains tax. If the stepped-up basis is eliminated, heirs inheriting assets will face significantly higher taxes upon the sale of the assets. However, if the stepped-up basis is eliminated, more opportunities may exist for gifting.
Your best course of action is to be in contact with your legal and tax advisors to determine the best course of action for you. At Wright & Moore, we can help you with this concern as well as all your business, estate and succession planning needs.
Wright & Moore Law Co., LPA is a proud partner with Ohio Farm Bureau. Since 1988, our firm has assisted farmers, rural residents, and landowners from all over the state with their farm succession planning and agricultural legal needs. To learn more about Wright & Moore, visit OhioFarmLaw.com.
The ballot initiative asks Ohio voters if the state should strengthen the petition process and raise the threshold to 60% for approving constitutional amendment proposals.
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