NCBA Letter Regarding Stepped-Up Basis

NCBA and 40 other national and regional organizations sent a letter to US House and Senate leadership last week expressing significant concerns about legislative proposals that would jeopardize the future of family owned farms and ranches. The group specifically urged lawmakers not to alter or eliminate long standing tax code provisions that are fundamental to the financial health of production agriculture, and the businesses that supply its inputs, transport its products and market its commodities. Three critically important tax provisions were highlighted in the letter, including stepped up basis like kind exchanges and the section 199 a business income deduction. assets in agriculture typically are held by one owner for several decades, so resetting the basis on the value of the land, buildings and livestock on the date of the owner's death under stepped up basis is important for surviving members and business partners to ensure the future financial stability of the operation. The like kind exchange provisions allow businesses to buy and sell like assets without tax consequences, thus helping farmers and ranchers who are typically land rich and cash poor, maintain cash flow and reinvest in their business. Additionally, to maintain a reasonable level of taxation for pass through businesses like farms and ranches, it is critical to preserve the section 199 a business income deduction.