![stepped](https://i0.wp.com/southeastagnet.com/wp-content/uploads/2019/11/soybean-field.shutterstock_759949660-1024x683.jpg?resize=742%2C495&ssl=1)
Any change in capital gains tax policy that eliminates or scales back stepped-up basis could result in a massive tax burden on the agricultural sector. A new analysis by the American Soybean Association and the American Farm Bureau Federation confirmed the findings.
To minimize the impact of burdensome capital gains taxes, farmers and ranchers use a stepped-up basis, which provides a reset for the asset value basis during intergenerational transfers. The magnitude of the tax burden that would be felt if the basis is taken away or reduced would likely significantly exceed the annual income generated by the assets, something that has American farmers concerned.
ASA President Kevin Scott says, “What people may not realize is that it could take years of returns to equal the amount of the tax if a stepped-up basis is reduced, or worse, eliminated.”
AFBF President Zippy Duvall adds, “Eliminating stepped-up basis would make passing the family farm to the next generation much more difficult.”
(From the National Association of Farm Broadcasters)