Kiss Your Farm Enterprise, Goodbye

[gurly3801539]

Jen that goes right back to what I said, the sale should trigger the tax not death.  Bruce jump in with your "just know" line.

[OKdon]

I differ in that I think the change of ownership should trigger capital gains tax. After all the tax bill needs to come due at some point in time and if we tax income we should tax all of it. An old retired guy like my self shouldn't be allowed to escape the long reach of the IRS beyond my period of existance. So my $800 land is worth $8000 that is $7200 of gain that is untaxed. And that is just one farm. None of that gain  has been taxed since I bought it.

It should be enough that the taxes on that gain has been postponed for 30 40 or 50 years. I'll bet Joe the plumber would like to postpone his income tax bill for 40 years. Irronically wages of late have not improved at the rate of inflation. Yet kindly Uncle Sam makes them pay taxes on their new improved income evn though it will buy less than last year.

[gurly3801539]

You have no gain until you sell.  You have a piece of paper that says you own the same land.  No sale no gain.  Take your net worth statement to HyVee and see if they give you food.

[NewAgJudge]

A death triggers a change of hands. = New ownership.

The tax is appropriate.

[gurly3801539]

Our opinions differ.  I am not against paying taxes.  Death is not an appropriate trigger.

[hardnox]

As that is at the $500M threshold I'm only a little worried. 

Still proposes an exclusion near the current- around $10M for a couple. I'm comfortable that covers the Family Farm thingy pretty well.

If someone actually wanted another generation to farm I'd assume they'd prefer that the neighborhood BTO's kids start on second base rather than third.

By phrasing it as "your" farm enterprise you're busted on the propaganda count. I'm not sure what the other exigent matters are that demand you serve as Juda Goat for the family farm on behalf of oligarchs.

[NewAgJudge]

Then don't die !

[hardnox]

Of course it is. The assets change hands.

And of course there is a full spousal exclusion.

BTW, Don has always been absolutely correct on this- the "right" way to do it is to subject it to CG taxes at that time but to have CGs subject to inflation indexing. That way there is no double taxation, but there's also no zero taxation.

I'd also suggest that the "right" way to do things is to tax CGs is to tax them at the ordinary income rate but with inflation indexing. There's no social benefit to giving anyone a break for a two year flipping exercise- in fact to the contrary, probably leads to undesirable behavior. But it also isn't fair to use inflation as a tax.

#3- an absolute. No estate tax, no basis reset. Upper middle class and modestly wealthy people actually benefit greatly from little or no estate tax but a mark to market cost basis valuation.

But we're getting way inot Joe the Plumber territory there- minds that are repelled by engaging with the least bit of complexity go into full lockdown mode.

[OKdon]

Once ownership of an asset changes hands, it's time to pay the piper for the decades of gains you have earned and remain untaxed.  Why in the world should you get preferential treatment from the IRS. What your saying is that my family invested well and deserve to keep all our assets while Joe blow had his paycheck cut each and every week.

You must thonk the working class owes more to the government than the investor class. 

[gurly3801539]

You assume you know what I think.  I think if  "Joe blow" accumulated 15 million in stocks and left them to his kids they should not pay tax unless cashed in.  I nor any one deserves special tratment.