President Joe Biden announced his American Families Plan (AFP) last night during his address to Congress. The plan targets several provisions of the tax code to raise about $1.5 trillion in revenue over the next 10 years.
Specifically, AFP would repeal the deferral of gain for real estate like-kind exchanges for gains greater than $500,000 and eliminate stepped-up basis for gains of more than $1 million ($2.5 million per couple “when combined with existing real estate exemptions”) and tax said gains on any property not donated to charity. AFP does state the reform will be designed “with protections so that family-owned businesses and farms will not have to pay taxes when given to heirs who continue to run the business.”
NCBA has long advocated for sound tax policy for rural America and will continue to do so. According to NCBA Senior Executive Director of Government Affairs Danielle Beck, preserving long-standing tax provisions such as stepped-up basis and like-kind exchanges is critical when considering the financial viability of farms and ranches, as well as the ability for the next generation of producers to conserve the land and business that has been in their family for generations. She said NCBA is committed to holding members of Congress accountable for legislation that will protect the viability of farm and ranch businesses.
“To be clear, we firmly believe that it would be irresponsible to pay for an infrastructure bill on the backs of farmers and ranchers and with that, counterintuitive with this Administration's conservation agenda. These provisions in the tax code are a determining factor in whether farmers’ and ranchers’ access to land is maintained for generations to come, or if that land is fragmented and further threatened by conversion and development or paved over outright for strip malls and shopping centers,” Beck said.