Michigan Farm Bureau (MFB) is urging farmers and supporters to tell Michigan’s Congressional delegation to oppose proposals within the 2022 budget that would repeal stepped-up basis or impose new capital gains taxes.
Messages can be easily sent by visiting https://bit.ly/protectfamilyfarms or texting the phrase MIFARMS to the number 52886.
According to MFB National Legislative Counsel John Kran, either move would make it difficult to pass farms — and other small businesses — on from one generation to the next.
“Congress is crafting a $3.5 trillion 2022 budget resolution that will need to be offset by spending reductions, deficit spending and tax increases,” Kran explained. “Alongside the American Farm Bureau Federation, we’re doing everything we can to make sure family farms are not burdened with funding the government and sacrificing their ability to pass on their farm, land and equipment on to the next generation.”
MFB President Carl Bednarski emphasized just how detrimental the elimination of stepped-up basis and additional capital gains taxes would be to the state’s farm families.
“The price of land, high-tech and sophisticated farm equipment, and on-farm processing and storage systems are all common components of a modern farm — easily exceeding several million dollars on a typical farm today,” he said.
“With the loss of stepped-up basis, the next generation may be forced to sell off large portions of vital farm assets just to pay the capital gains tax.”
Kran also said that retaining the stepped-up basis tax method encourages families to continue investing in their business.
“Stepped-up basis better positions farms to be passed from one generation to the next because it allows a farmer to pay capital gains taxes only on a property’s increase in value since the time that land was inherited, instead of paying the full increase in value since it was purchased by a deceased relative.”
Again, messages can be sent to representatives and senators by visiting https://bit.ly/protectfamilyfarms or texting the phrase MIFARMS to the number 52886.
While a prewritten message is provided, members are encouraged to consider adding a personal story about how your family and farm would be impacted by this issue.