Farm Bureau raises questions about GOP tax proposal
The American Farm Bureau Federation has been generally enthusiastic about tax reform, but this week Patricia Wolff, Farm Bureau’s tax specialist, said there are still many unanswered questions about the Republicans’ tax reform proposal.
On an AgriTalk radio show, Wolff listed a number of issues farmers and ranchers need to ask members of Congress to address:
» While the plan would eliminate the estate tax, it does not mention stepped up basis.
» The plan raises questions about how farm income is separated between personal and business.
» The tax framework may require farms to switch to accrual accounting rather than cash accounting. That could have a negative impact on cash flow for some operations
» Will the tax plan eliminate section 1031 like-kind exchanges that allow deferral of taxes on asset transfers?
» It is unclear if farms will be able to deduct interest costs.
» Deduction for local and state property taxes may be eliminated.
In an appearance on RFD-TV, Wolff said the proposal would lower rates and eliminate the estate tax, but “what we don’t know is what farmers and ranchers will have to give up.”
The proposal has “the potential to be a benefit for rural America, but the devil is in the details,” she said.