Rep. Mann Introduces Legislation to Preserve Stepped-up Basis

WASHINGTON, D.C. – Today, on National Agriculture Day, U.S. Representative Tracey Mann (KS-01) and U.S. Representatives Jim Costa (CA-21), Robert Latta (OH-05), Angie Craig (MN-02), Adrian Smith (NE-03), and Jimmy Panetta (CA-19) introduced legislation alongside more than 50 of their colleagues recognizing the importance of stepped-up basis in response to the Biden Administration’s budget proposal which suggests the elimination of the tax provision for agricultural producers and small business owners.

“Today, on National Agriculture Day, I introduced legislation recognizing the importance of stepped-up basis in response to the Biden Administration’s budget proposal, which suggests the elimination of the tax provision for agricultural producers and small business owners. 98% of all American farms and 90% of all American businesses are family-owned and operated,” said Rep. Mann. “These men and women form the backbone of America, and Congress must support their efforts, not crush them with devastating capital gains taxes. I will always stand with small businesses and family farms. This legislation is an integral part of my commitment to representing the people of the Big First to the best of my ability.”

"Eliminating stepped-up basis would hurt agricultural producers and small business owners by weakening their ability to keep generational assets in the family," said the Members. "The day-to-day trials of operating a successful farm, ranch, or small business are challenging enough without worrying about paying devastating capital gains taxes. We must preserve stepped-up basis and protect farmers, ranchers, agricultural producers, and small business owners both now and in the future." 

“I commend Rep. Mann’s proposal to protect stepped-up basis, preserving an important estate planning tool for the generational farms and ranches in Kansas and across the country," said Joe Newland, Kansas Farm Bureau President. "Without stepped-up basis, the next generation could have to face the difficult decision of selling pieces of their heritage just to pay the taxes.” 

"Agriculture is a capital-intensive business requiring assets like land, equipment, and buildings," said NAWG president and Oregon wheat farmer Brent Cheyne. "Eliminating stepped-up basis and instituting a transfer tax could result in families being forced to sell their farms to pay increased taxes triggered after a family member's death or changes in operation structure. NAWG appreciates all of those involved in creating this bill for their dedication to protecting the family farmer."

Stepped-up basis is a longstanding provision within the tax code that protects people from being forced to pay capital gains taxes on inherited assets such as land, equipment, or buildings, allowing recipients of such inherited assets to adjust their cost basis to reflect their fair market value.  

98% of all American farms are family-owned, and a study conducted by the U.S. Department of Agriculture’s Economic Research Service determined that 66% of all midsized farms would see an increased tax liability if stepped-up basis were eliminated.  

This stepped-up basis resolution commits the House of Representatives to support the preservation of the stepped-up basis, opposing any efforts to impose new taxes on family farms or small businesses, and recognizing the importance of generational transfers of family-owned farms and small businesses. 

Click hereto view the full text of the legislation.

Click here to see Rep. Mann’s Commitment to the Big First.

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