Biden’s tax plan includes not only a removal of the step up in basis but an immediate tax due on unrealized capital gains assessed on the transfer. So, whether you sell the farm or not, you’ll owe the tax on the increase in value from the day it was purchased to the day you inherit. So, of course, the only way for most people to pay it will be to sell.
Obviously, the little guy will take it up the ass. Corporations, the ultra rich, and of course Chinese investors will soon own all the land.
I'm not following this and I am not especially knowledgeable about taxes but doesn't this mean that a person inheriting a farm (or other real estate) would pay capital gains on it based on their income? So an individual who inherits that makes between $40k and $450k per year or a married couple making between $80k and $500k per year would owe 15% on the value of the real estate. If you make less, there is no tax. If you make more, the tax is 20%. So, for example, most people inheriting a $500k property would owe $75k in taxes. That sucks but wouldn't necessarily mean that they would sell. If I was in that spot and I didn't have the money to pay the tax, I would just take a line of credit against the property and pay it back over a few years. I don't like this plan (although I am not going to inherit any wealth or property), I don't think it is as black and white as you are saying. Keep it or sell it, you still end up paying the tax so it makes just as much financial sense to keep the land.
