Grassley legislation would assist bankrupt family farmers

[rswfarms]

I wasn't even aware of this, a good article to read if corn drops to under $2 a bushel. It is out of a Iowa paper/

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Grassley legislation would assist bankrupt family farmers

Sen. Chuck Grassley has introduced legislation that would reverse a 2012 Supreme Court ruling that has made it difficult for family farmers to reorganize their finances when they file for bankruptcy.

The bill, which Grassley introduced with Sen. Al Franken, D-Minn., “remedies” a ruling by the Supreme Court in May of 2012 that said despite Congress’s express goal of helping family farmers, the language inserted into bankruptcy reform law in 2005 conflicted with the tax code.

The measure clarifies that bankrupt family farmers reorganizing their debts are able to treat capital gains taxes owed to a governmental unit, arising from the sale of farm assets during a bankruptcy, as general unsecured claims.  It removes the Internal Revenue Service’s veto power over a bankruptcy reorganization plan’s confirmation, giving the family farmer a chance to reorganize successfully.

“Chapter 12 helps the farmer and the banker sit down and work out alternatives for debt repayment so a farmer can keep his land,” Grassley said.  “There’s no question what our intent was when we wrote the 2005 law.  We simply need to ensure the plain language of the law says and does what we intended.”

Chapter 12, which was made permanent in 2005, allows family farmers to sell portions of their farms to reorganize without capital gains taxes jeopardizing the reorganization. Before then, the IRS took money through the capital gains taxes, leaving no money left to pay the other creditors. As a result, the farmer had to sell the rest of the land and still lost the family farm.