Trump's Tax Plan in the Air, Capital Gains Could Replace Death Tax

May 2, 2017 12:21 PM
 
 

President Trump proposed dramatic cuts in the taxes paid by corporations big and small. According to his administration, the overhaul will spur economic growth and bring jobs and prosperity to America’s middle class.

Paul Neiffer, a tax accountant with CliftonLarsonAllen LLP, says the impact of the proposed plan isn’t known quite yet.

“We know the top tax rate for farmers is going to come down, we just don’t know what income it’s going to be applied to,” said Neiffer. “Individual wage earners will see a small tax reduction. Farmers, other businesses, if this goes through, will likely see a large tax decrease.”

When it comes to Section 179, Neiffer says it hasn’t been discussed much and will likely have provisions. What may be the biggest topic is the estate tax, also known as the death tax, which some farmers criticize.

“The threat of being hit by the death tax leaves small business owners and farmers in this country to waste countless hours and resources on complicated estate planning to make sure their children aren’t hit with a huge tax when they die,” said Neiffer.

He says less than 10 percent of farm families in the U.S. would potentially get hit with the estate tax. While eliminating it sounds like a good plan in theory, he says farmers need more details.

“If they eliminated the estate tax or applied some type of capital gains tax at death, that would be a large tax increase for a lot of farm families,” said Neiffer.

To Neiffer, it appears this tax plan will help farmers who make $1 million or more per year, and it’s likely to be a big tax savings for farmers nearing retirement.

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Comments

 
Spell Check

Jim
Dacoma, OK
1/1/2018 10:16 AM
 

  Interested in capital gains tax on farmers needs a big looking into. If a farmer 40 years ago borrowed money paid interest and work the farm and had off farm job just to pay his land off the gat retirement age wants to sell the land he doesn’t have much left and if he has a little left he had to give up his very small socical security check but has to give it to the rest Home just to live think about this

 
 

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