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TAXATION

ISSUE: Passing the family operations to the next generations without tax hardship is

imperative to the continuation of the farm and ranch operations in the United States. The

survival of the farm and ranches must be considered in tax laws, for family operations to

survive, operate and provide nutritious, affordable food and products to the United States

and the world.


AMERICAN AGRI-WOMEN REQUEST:

American Agri-Women urge Congress and the Administration to apply the following

tenets in tax law.


BACKGROUND:

Estate & Gift Tax:

• AAW supports saving the family farm and ranches!

• The American Agri-Women are afraid for the farmers and ranchers if the estate

tax exemption set up by the Tax Cuts and Jobs Act of 2017 is allowed to expire as

of January 1, 2026. The estate tax exemption must remain intact and increase as it

has with inflation. This has allowed many farms and ranches to transition to the

next generation upon the death of the owner, operator, father, mother,

grandparents, or loved ones. Inflation has caused the value of agricultural and

ranch land and equipment to increase. With that, the estate exemption must also

increase with inflation. Estate Tax rates must decrease instead of increase.

• For agricultural estates to pass to the next generation, the estate tax exemption

along with the stepped-up basis on all assets must be maintained. A stepped-up

basis is mandatory, as it is the value of the asset at the time of death.

Capital Gains Tax:

• AAW does not support raising the Capital Gains tax rate.

• A capital gains tax rate is currently applied on the sale of all agricultural

farmland, equipment, animals, and purchased property.

Tax Increases:

• AAW asks that you support the survival of small businesses, the family farm, and

ranches by reducing taxes not raising them. To say that a tax increase would

affect only high-income individuals is false. It would affect all small businesses,

farmers, ranchers, and tax paying individuals.

ISSUE: Passing the family operations to the next generations without tax hardship is

imperative to the continuation of the farm and ranch operations in the United States. The

survival of the farm and ranches must be considered in tax laws, for family operations to

survive, operate and provide nutritious, affordable food and products to the United States

and the world.


AMERICAN AGRI-WOMEN REQUEST:

American Agri-Women urge Congress and the Administration to apply the following

tenets in tax law.


BACKGROUND:

Estate & Gift Tax:

• AAW supports saving the family farm and ranches!

• The American Agri-Women are afraid for the farmers and ranchers if the estate

tax exemption set up by the Tax Cuts and Jobs Act of 2017 is allowed to expire as

of January 1, 2026. The estate tax exemption must remain intact and increase as it

has with inflation. This has allowed many farms and ranches to transition to the

next generation upon the death of the owner, operator, father, mother,

grandparents, or loved ones. Inflation has caused the value of agricultural and

ranch land and equipment to increase. With that, the estate exemption must also

increase with inflation. Estate Tax rates must decrease instead of increase.

• For agricultural estates to pass to the next generation, the estate tax exemption

along with the stepped-up basis on all assets must be maintained. A stepped-up

basis is mandatory, as it is the value of the asset at the time of death.

Capital Gains Tax:

• AAW does not support raising the Capital Gains tax rate.

• A capital gains tax rate is currently applied on the sale of all agricultural

farmland, equipment, animals, and purchased property.

Tax Increases:

• AAW asks that you support the survival of small businesses, the family farm, and

ranches by reducing taxes not raising them. To say that a tax increase would

affect only high-income individuals is false. It would affect all small businesses,

farmers, ranchers, and tax paying individuals.

• AAW supports the continuation of the Sec. 199A deduction for pass-through

businesses. Currently set to run through 2025.

• AAW does not support increasing tax rates, with a flat inflated rate for corporate

farm operations and businesses or increasing individual rates and decreasing the

income threshold to $400,000.00.

• AAW supports the depreciation recapture rules when farm and business

depreciable assets are sold on retirement or cessation of business.

• AAW supports tax-deferral options by using installment sales and Sec. 1031 likekind exchange.

• AAW does not support the repeal of “step-up basis”. The “step-up basis” is not a

loophole to avoid taxes. It is a necessary process to help pass the farm onto the

next generation.

• AAW does not support an increase in investment tax on all small businesses,

including farmers and ranchers with an income over $400,000.00. This income is

needed to continue the business.

• AAW supports special exemptions for purchases of machinery, equipment, land

improvements, livestock, and buildings.

• Supports the accelerated depreciation to allow a shortened recovery period of 15

years versus 39 years for “qualified improvement property”.

• AAW supports the continuation of electing to expense certain property under

Section 179 expensing election.

• AAW supports measures that provide tax simplification for farmers, ranchers, and

small business and opposes any effort to make tax laws more burdensome.

• AAW supports the cash accounting method for family farmers and ranchers,

regardless of income.

• AAW supports the deductibility of all inputs and business expenses, regardless of

origin.

• AAW supports interest paid on business loans as fully deductible as the cost of

doing business.

• AAW supports FICA and Medicare taxes (Self-Employment tax) to be assessed

only on wages, not on pass through dividends to shareholders from corporatestructured farms.

• AAW supports the 100% deduction for health insurance for the self-employed

and family-owned corporations regardless of business structure.

• AAW supports the prevention of a government run family and medical leave

program regardless of the number of employees.

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