Transfer Tax Pt 1
I’m Bob Larson. Part of President Biden’s American Families Plan includes a proposal of a new transfer tax that farm and ranch families should be wary of.
That’s according to Paul Neiffer, with Clifton Larson and Allen Accounting firm, who says the million-dollar exemption on appreciated assets sounds good, but …
NEIFFER … “In the farm arena, your typical farmer that is making a living from farming would easily exceed that million-dollar threshold.”
Neiffer says it’s pretty simple really …
NEIFFER … “So, the transfer tax, what happens is on their form 10-40, right on their personal tax return, they’re going to add up all that appreciation and whatever exceeds the exemption amount is just going to become capital gain income on that tax return. And, if Biden’s proposal goes through, that tax rate would be a maximum rate of 43.4%, plus whatever state income tax might be applicable.”
Bottom line, Neiffer says the transfer tax is substantially worse than the estate tax …
NEIFFER … “The farm family worth $3-million would owe $5-million of transfer tax and own no estate tax, a matter of fact they would be negative. They would go from being worth $3-million to being $2-million in the hole because of this transfer tax.”
Tune in tomorrow for more on the transfer tax proposal and why farmers and ranchers should be urging Congress to reject it.
