Applications for Ohio Farm Bureau Health Plans now available
Members have three ways to apply: contacting a certified agent, calling 833-468-4280 or visiting ohiofarmbureauhealthplans.org.
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.
Let’s look at an example
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.
What if stepped-up basis is eliminated
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.
My first recommendation in your journey is to start out with a local farming friend or mentor along with joining an organization like Ohio Farm Bureau.
We’re just so thankful for the Farm Bureau and the foundation for helping put this together. And of course, the Boyert family for the vision they had with this grant. It’s jumping us forward 10 years. It’s unbelievable.
I could not have done it without the resources I have found through Farm Bureau.
It wasn’t until I joined the Wilmington College Collegiate Farm Bureau that I truly saw how my passion could translate into leadership, advocacy and a career.
The issue of property taxation remains as one of the biggest challenges our members face today. Ensuring agricultural property is valued for its agricultural potential and not development is critical to the continued success of Ohio agriculture.
Through the Select Partner program, we became educated in farm insurance and weren't just selling policies. It became more and more clear why farmers need an advocate like Ohio Farm Bureau.
So many of the issues that OFBF and its members are advocating for are important to all Ohioans. I look at OFBF as an agricultural watchdog advocating for farmers and rural communities across Ohio.
Featured Articles
Ohio must not make it easier to seize your property for data centers, other projects
Ohio Farm Bureau recently published an op-ed in The Columbus Dispatch highlighting the importance of protecting private property rights as discussions continue around expanding eminent domain powers in Ohio.
Read More
What would Grandma and Grandpa have wanted?
These discussions should not begin and end with a developer’s offer. Identifying family goals now gives the family something to plan around.
Read More
Ohio Farm Bureau, partners pack 10,000 meals to kick off Food and Farms Month
Ohio Farm Bureau joined leaders from across Ohio’s food and agriculture industry this week to pack 10,000 meals for central…
Read More
Ohio Farm Bureau supports expanded use of dyed diesel
The administration recently issued an executive order easing restrictions on the use of tax-exempt dyed diesel fuel for on-road agricultural transportation.
Read More
Legal with Leah: Eminent Domain and Quick Take
Ohio Farm Bureau Associate General Counsel Leah Curtis explains how the eminent domain process works in Ohio, what ‘quick take’ means and when it can be used.
Read More
Ohio Farm Bureau statement on gas tax holiday
As fuel prices skyrocket across the state, lawmakers are preparing to return to the Statehouse to vote on the temporary suspension of Ohio’s gas tax.
Read More
Ohio’s 2026 top conservation farmers honored
Since 1984, the Conservation Farm Family Awards program has recognized Ohio farm families for their exemplary efforts conserving soil, water, woodland, wildlife, and other natural resources.
Read More
Growing our Generation: A life of service
Meet Joe Everett, a Shelby County Farm Bureau Young Ag Professional who has dedicated his life to service, both in uniform and within his local community.
Read More
How to prepare for a year-end conversation with your lender
A year-end review provides an opportunity to evaluate your operation’s financial position, discuss future goals and develop strategies for the upcoming season.
Read More