By Chuck Abbott
Successful Farming
During his campaign for the White House, President Biden said he would eliminate “stepped-up basis,” which allows heirs to avoid capital gains taxes, and he is expected to carry out the pledge this week to pay for an expansion of social programs. Farm groups say elimination of the tax break would impose a burden on agriculture.
Biden broached the idea of eliminating stepped-up basis, a part of the tax code for decades, in October 2019, as a way to offset the cost of two years of free community college for students. Stepped-up basis means that when property passes to an heir, it is assessed at its current value, and taxed at that rate when it is sold, rather than the increase in value from when it was originally acquired by the family.