Bill meant to encourage first-time agrarians

Wednesday, July 30, 2003

A new bill, currently under review by the House Ways and Means Committee, proposes offering capital gains tax credits to existing farm and ranch owners who sell to first-time agriculture producers. The aging of the agriculture industry has become more and more of a problem. According to the Missouri Arthritis Rehabilitation Research and Training Center the average age of Missouri farmers is 54.7 and the average age of U.S. farmers is 54.3. Nebraska Republican Lee Terry, co-sponsor of the bill said in a press release, "The goal here is to help the next generation of farmers and ranchers compete with more established producers and, at the same time, improve the quality of life in rural areas near our growing cities." There proposed bill breaks up the capital gains tax rebates in the following ways. First, the sale of a qualified farm property to a first year farmer will result in 100 percent payback of the capital gains tax on the sold property. In addition, if the farm is sold to an agriculture producers, just not a first time producers, then the seller will receive a 50 percent capital gains tax credit. However, there is still a 25 percent capital gains tax if a farm is sold to anyone for any other use. The bill also stipulates if the said land is used as something other than farmland within the first 10 years, then a sliding scale is applied to the tax credits earned to determine how much is to be paid back. There are restraints written within the bill to limit the amount of tax credit gained. The amount of gain excluded from taxes, in a given year, cannot exceed $500,000. For land to qualify as agriculture land for sale, it must have been used for agricultural production for at least three of the last five years. "Our overall success is tied directly to our food production. We can find reasonable ways to encourage more young people to enter agriculture's ranks, and to ensure adequate land resources for the future. This plan can play an important part in securing a strong U.S. farm sector," said Terry.

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