Farmer’s Guide to Trucking Regulations available to Ohio Farm Bureau members
The guide includes a farm driver checklist, overview of state and federal regulations and exemptions, CDL qualifications and more.
Read More
by Ryan Conklin, Wright & Moore Law Co., LPA
If you have been following the news on Capitol Hill in recent weeks, you may have heard about proposed tax code changes. The STEP Act outlines several major revisions to gifting rules, capital gains, and stepped-up tax basis. Given the proposed changes to tax basis rules, I think it’s a good time to talk about some basics of tax basis.
According to the IRS, tax basis refers to “the amount of your capital investment in property for tax purposes.” This capital investment can be what you paid in cash, assumed in debt commitments, or exchanged for other property or services. Basis can be modified through events like adding improvements to real estate, inheritance, or through depreciation.
Pretend you purchase a 100-acre farm in 2000 for $1,000 per acre. Your tax basis would be the $1,000 per acre purchase price. Fast forward 20 years, and your heirs inherit the property after your death. After you pass away, the farm appraises at $10,000 per acre. This new appraisal value constitutes the new tax basis because the heirs receive a “stepped-up” basis after your death.
A similar outcome is achieved with farm equipment. If you buy a tractor for $100,000, the purchase represents the basis. From there, if you use applicable tax rules to depreciate the purchase, the new basis is the depreciated amount. At death, the tractor is reappraised, a new basis is established, and the tractor can be re-depreciated by the new owner.
The elimination of stepped-up basis could be catastrophic for family businesses. It could result in new taxable events stemming from gifts, moving assets into trusts or LLCs, sales of depreciated assets, or through inheritance. The capital-intensive and debt-reliant nature of agriculture means many farms could struggle with these tax bills. To cap it off, stepped-up basis could be hard to come by under this new statutory scheme.
Please keep in mind that the STEP Act is only a bill, and must clear tight margins and intense scrutiny in both houses of Congress. American Farm Bureau distributed an action alert in early April asking members to lobby their representatives to oppose this bill. I would urge readers to join in this effort, as the loss of certain tax basis provisions could jeopardize farm survivability nationwide.
Consult your tax professional for more information to help your family or business.
Wright & Moore Law Co., LPA has a rich heritage in Ohio agriculture. Since 1988, our firm has proudly assisted farmers, rural residents, and landowners from all over the state with their farm succession planning and agricultural legal needs. We would be happy to discuss your family goals and how to meet them. To learn more about Wright & Moore or schedule a meeting, call 740-990-0750 or visit OhioFarmLaw.com.
The guide includes a farm driver checklist, overview of state and federal regulations and exemptions, CDL qualifications and more.
Read More
ODA will enroll 500,000 acres into the program for a two-week sign-up period, beginning April 22, 2024, through May 6, 2024. Contact local SWCD offices to apply.
Read MoreKatie Share of Columbus has been named ExploreAg and Youth Development Specialist for Ohio Farm Bureau.
Read MoreMary Klopfenstein of Delphos has been named Young Ag Professional and Ag Literacy Program Specialist for Ohio Farm Bureau.
Read MoreThe plan has been updated to give sole proprietors access to more rate stability and a smart solution that offers potential savings on health care.
Read MoreThe American Farm Bureau Federation, in partnership with Farm Credit, is seeking entrepreneurs to apply online by June 15 for the 2025 Farm Bureau Ag Innovation Challenge.
Read MoreAdele Flynn of Wellington has been elected treasurer of the Ohio Farm Bureau Federation and now holds the third highest elected office in Ohio’s largest and most influential farm organization.
Read MoreProducers are urged to work with their veterinarian to practice enhanced biosecurity measures and review and limit cattle movements within production systems.
Read MoreThe changing seasons bring with them the need to thoroughly inspect pole barns for any damages that may have occurred during the winter months.
Read MoreHundreds of Ohio businesses and sole proprietors are raving about Ohio Farm Bureau’s Health Benefits plan with lower, predictable costs and easy enrollment and administration options.
Read More