The American Bankers Association and a coalition of trade groups yesterday urged the House Ways and Means Committee not to change the stepped-up basis tax rule that prevents family-owned businesses and farms from damaging tax bills when a family member passes away. Earlier this year, the Biden administration, through the American Families Plan, proposed replacing stepped-up basis with other unspecified protections.
“It remains unclear how and if these protections would shield future generations from substantial tax increases—but we know that current law already provides effective protections for families seeking to pass a business on to the next generation,” the groups wrote in a letter to committee leaders.
Proposed carryover-basis tax rules to replace stepped-up basis would only delay tax burdens for family-owned businesses and farms, the groups wrote, adding that once assets are sold the total tax bill “will be the same as if gains were taxed at death” and that the process is “an administrative nightmare.”
