A group of U.S. Senate Democrats have issued a proposal that would eliminate the step-up in basis for assets upon death, tax the unrealized capital gains at death and leave the estate tax in place. This means farmland and other assets necessary to carry on an agricultural operation would get taxed once on unrealized capital gain, then again on the total value of the estate’s assets. While the draft bill would exempt a spouse from the realization of gain upon death of the other spouse, it would not exempt transfers to minor children upon the death of both parents. KLA and NCBA oppose this proposed legislation.
Prior to this proposal being put forward, the Death Tax Repeal Act of 2021 was introduced in Congress. The legislation would repeal the federal estate tax. NCBA and KLA will continue to push for elimination of this tax and work to prevent enactment of any tax policy that would be detrimental to the continuity of family farm operations.