Analysts are going over the far-reaching tax proposal being unveiled by House GOP lawmakers.
Negotiators are trying to finalize the details of the first major revamp of the tax system in three decades.
According to emerging details, the estate-tax exemption, set for $5.6 million per person and $11.2 million per married couple, would double immediately under the House plan. The tax would get repealed starting in 2024.
Even after repeal, heirs would continue to get a “step-up in basis.” That means they would only owe capital-gains taxes on the difference between the sales prices of an asset they inherit and the value of the asset at the previous owner’s death.
Farmers and ranchers are looking for clarity on interest deductibility for business expenses, along with how the plan will address a business deduction for domestic production. Other specific tax provisions farmers are watching include “like-kind” land exchanges, which allow for business tax deferments on land sales if the buyer is using the sale to acquire new land for a similar use.
We visited with North Dakota Congressman Kevin Cramer about the package just prior to its release. Listen –> TAX Package
Meanwhile, Chuck Conner, president & CEO of the National Council of Farmer Cooperatives, released a prepared statement today – saying he was disappointed by one particular item that was eliminated in the House Tax Reform Package.
“By eliminating the Domestic Production Activities Deduction (DPAD), also known as Section 199, the “Tax Cuts and Jobs Act of 2017,” the tax reform proposal released today by House Ways & Means Chairman Kevin Brady, would raise taxes on millions of farmers and depress economic activity throughout rural America.
The value of the deduction for agriculture in a number of states is substantial: $136 million annually in California; $131 million in Minnesota; $80 million in South Dakota; $67 million in Iowa; and $60 million in Nebraska.
Initial calculations using assumptions based on the Unified Framework on tax reform show that the tax burden for an individual farmer could increase by thousands of dollars each year under Section 199 repeal. In the coming days NCFC will continue to analyze the impact of farmers now that more details of the plan have been provided.”