The STEP Act: what the Biden tax proposals could mean for farmers

Narrator: We are grateful that you are joining us for another episode of the Ag View Pitch, as we know that your time is very valuable. Our team at Ag View Solutions is always here for you for any questions or comments that you may have. Please feel free to reach out to us at cbarron@agviewsolutions.com. And now here is your host, Chris Barron.

Chris

Barron: Welcome everybody to another episode of the Ag View Pitch, and today we're going to have a conversation around the Biden tax proposals that are floating around that we're starting to hear conversation about. And we've got our special guest with us, Paul Niefer, Farm CPA, CliftonLarsonAllen. How's it going, Paul?

Paul

Neiffer: I'm doing pretty good. I mean, we got another— we got a 4-week extension to get tax returns done, although I'm not sure if that's a good deal or not. But I'm not quite burning the midnight oil like I might if I only had less than 2 weeks to go.

Chris

Barron: So yeah, it's not too bad. Yeah, well, you know, it just intensifies the procrastination a little bit further down the road, I suppose.

Paul

Neiffer: Yeah, yeah, that's the negative. Yeah, that is definitely the negative.

Chris

Barron: Yeah, for sure. So, uh, I guess this isn't— you know, I love talking to you and it's always fun to have conversations with you, Paul, but this isn't probably the one that I was hoping to have with you here ever, which is talking about, you know, this, the STEP Act, you know, it's the Sensible Taxation and Equity Promotion, which stands for STEP, and some of these things that we're starting to hear about. I kind of want to go through some of the nuts and bolts with you as to what this means and what this means to us as producers and the listeners that are across the U.S. that we work with that, you know, really are like, okay, what does this all mean? You know, is this going to be affecting us in 2021? What are the odds of some of these proposals going through? So let's get started here with kind of the gift tax.

We were talking offline, you know, we have a lot of producers that do some gifting over to the next generation as time goes on to kind of make that estate a little bit smaller when the time comes, you know, when we all face the inevitable death at some point. And so in the process, we kind of work at, getting some of that estate moved in advance to the next generation, and there's some threat there. Talk a little bit about that first, and we'll get into a few other nuts and bolts.

Paul

Neiffer: Yeah. And the third word in that was equity. Anytime you hear the word equity right now coming out of either Congress or the Biden administration, that's just another euphemism for redistribution of wealth. So this, this is all it is, is they're deciding people that have a certain amount of money, we're going to come up with some type of tax to take that money, and then we're going to redistribute it to those that don't have money. So what the proposal says is effective— and that's the key— effective for any transfers— I'm going to use the word transfers— any transfers after December 31st, 2020. So now we're in 2021, this is going to apply. Now the chance of it happening, yeah, as far as the 2021, it'll probably be 2022, but let's— this is the proposal. What it says is if you give any appreciated, so this doesn't apply if you give cash.

If you have $100,000 of cash and you give it to your kids or your grandkids, this transfer tax doesn't apply to that. But if you give your farmland, you give equipment that's been fully depreciated, you give grain, you give any asset that really has a base, a very low basis, tax basis, and it's got a high fair market value. Once you go over on a cumulative basis, so not annual basis but a cumulative basis, once you go over $100,000, then you're going to pay— I'm going to call it transfer tax. So it could either be capital gains rates, which would be— let's say Chris is in the state of Iowa, you're looking at probably about a 25 to 30% tax rate. If it's farm equipment, if it's grain and so on, you very easily could be looking at a 40 to 55% tax rate, just depending on where you're at and whether it's subject to self-employment tax.

So, so you get it, you get an exemption during lifetime of $100,000. If you don't use it, you get an exemption at death of $1 million. So it's $1 million at death or $900,000 if you used $100,000 of it during your lifetime. And we all know $100,000 is, is— that's not, you know, not much money these days for farm operations.

Chris

Barron: Right. That's scary. Um, you know, you know, go into a little bit more specific. Give us an example. You know, you've worked with us with a lot of clients when we, you know, look at structuring the business and thinking about that next generation and trying to get them set up so that, you know, that they can cash flow and that mom and dad can retire and they both can kind of cash flow and survive. Give us an example of the impact that this could have.

Paul

Neiffer: Yeah, so yeah, for a lot of transfers during lifetime, you know, from mom and dad to sons or daughters that are farming, Like Chris says, you're trying to transfer it so mom and dad have a minimal tax impact. To some degree, we don't care— well, the, the son or the daughter not getting a step-up, because if we do a gift, there's usually no step-up, isn't as big of a deal. Because the key issue is we don't want to have parents incur that tax liability in year 1. So we typically use some type of a gift, maybe a part sale, part gift. Well, what this means now is whether you gift it or whether you sell it, you're still gonna pay tax. Doesn't matter. I mean, once you go over that $100,000 value, it's gonna be 100% taxable whether you gift it or sell it. So for a lot of our transaction structures that we've done, it's really gonna be a completely 180-degree type situation.

And now this could be a little bit of a positive Chris, I don't wanna maybe use that word, but remember, under current rules, the kid that gets the asset doesn't get to redepreciate it or gets to deduct it. Under this proposal, since mom and dad have reported some type of gain on that asset, when it comes over to the child, they're gonna be able to depreciate it over 7 years or 15 years or whatever the years are. Or if it's grain, they're gonna be able to deduct that, or if it's chemicals or something else. They'll be able to deduct that. So, but they're likely going to be a lower bracket. And again, the key is, as a family farm unit, we don't want to incur that tax up front that Junior maybe gets to depreciate over 7 years. That's not a very good deal for the family as a whole, right?

Chris

Barron: Um, this stuff's just frustrating. But so, okay, Talk a little bit about the trust. We talked offline about that as well and how that is impacted potentially here as well, because a lot of family operations, you know, we talked offline, set up a trust and explain that a little bit. What kind of— what issues we can be dealing with there?

Paul

Neiffer: Yeah. So over the last, I would say the last 10 to 20 years, multiple states, South Dakota, Alaska, Delaware, and so on, have initiated or brought into place what we call Dynasty Trusts. It allows the farm family to put their land into a trust that's going to be in trust for family for the next 100 or 200 or 300 years. And by doing that, under the old rules, that meant they would never incur estate tax because nobody passed away. It was in trust, and they never— as long as they didn't sell the land, They never had to pay tax on that asset going into the trust.

Well, this says, or this proposal says, if you put assets into a non-grantor trust— we're not talking a living trust, we're talking a non-grantor trust where it's, it's out of your estate, you know, you physically have transferred the assets into the trust— every 21 years, not every 50 years, not every 30 years, but every 21 years That trust then has to pretend like they've sold all of their assets for fair market value and then pay capital gains, or if it's equipment, etc., ordinary income tax on those assets. Now, just on the appreciation, remember, if we put the land in there when it was $1,000 an acre and right now it's $12,000 an acre, and in 21 years it might be $20,000 an acre, and then another 21 years it'll be $40,000 an acre. Every time that 21-year period goes by, that trust has to report all that gain and pay tax on it.

And the government's going to know about this because they're going to require you to prepare— if your assets, my memory is in the, um, in the STEP Act, it says if your gross assets are at least $1 million or your gross income, not in net income, but your gross income is at least $20,000. That's a very small number. You have to prepare a balance sheet, an income statement. You have to list all the grantors, all the trustees, and all the beneficiaries, including their identification numbers. So the government's going to know every year, and I'm guessing that balance sheet's going to be on fair market value. They're going to require you to notify the IRS, here's our fair market value, so they know in 21 years what's going to happen. So, uh, you report that every year? You're going to get absolutely hampered. Do you report every year? Every, every year. Every year.

Think of all the extra work you're going to have to do, especially if there's— you are— because the evaluation people got sort of a boon in this step back because it says if you get a valuation done, that's a deductible item for, for your personal return or for the trust return. So they threw that in there. But yeah, that's where I think it's going. They're going to start requiring you maybe even to get a formal appraisal every year. Like if you put, you know, a C corporation into a trust for the benefit of your kids or land into the trust for the benefit of your kids or your grandkids or your great-grandkids, they may require, if it's over a certain amount, they may require a formal appraisal on that property every single year. That's sort of the direction I see Congress and, and the Biden administration going.

It's getting very— they, they want to be able to require you to give your net worth to them so they know how much they are looking forward to getting taxed every 21 years.

Chris

Barron: So for clarity, what is the— what are the rates in each of those categories? So we talked about transfer, we're talking about the trust and the estate tax.

Paul

Neiffer: Um, well, you know, the trust— the problem with trust is the top rate kicks in at about $13,000 of income, right? So once you go over $13,000, if Biden gets his way, capital gain rates will kick in at ordinary rates. So you're talking 40% federal plus state. So just pretend like you're going to have $12,000 or $13,000 taxed at maybe 15%, 20%, 25%, and then remainder is going to be at including estate, you're 50%.

Chris

Barron: So I guess what I want to ask kind of the obvious question that probably half the people or everybody's thinking is, okay, well, how do we transition this, any of this over to the next generation without without forced sales here with landowners?

Paul

Neiffer: You know, I, again, on farm real estate, that's going to be a little bit tougher. You know, there's likely, if this goes through, there's going to be some type of exemption for farmers higher than this million dollar. We've already had discussions with some people back in DC that, you know, are already fighting this, and I think I think once Congress understands, and again, this is a proposal, but the problem is this is not a normal year. In a normal year, this would never stand a chance of getting anywhere. But with this pandemic and the progressives out there right now, they feel like they know they have about a 7 to 8 month window to cram all this stuff through because they know next year the House is going to be Republican. That's, you know, they're guaranteed that, they know it.

Senate may or may switch back to Republican, but until Biden's gone, you know, if they can cram it through, it's going to be that way for the next 3 years at least.

Chris

Barron: Well, and then the, the connectivity of the quote-unquote infrastructure bill that really is not, at least from what I've seen, unless you're seeing something different, isn't really infrastructure. It's about 5% infrastructure and the rest social justice or whatever you want to call it. So, yep, yep, I, I guess my question there is if that And they're going to, they're going to probably— it looks like they'll probably get that pushed through. I'll get your opinion on that in a second here. Then that almost— if they get that pushed through, then, then they got to pay for that. As you know, it's, it's the spend and then tax thing here, or tax and spend, or spend and tax, whichever order.

Paul

Neiffer: Yeah. Yeah. They're already talking about having a 15-year scoring because normally when you pass a bill through reconciliation, that's how you can get it through the Senate with 51 votes. 50 Democrats, Vice President Harris. The only way you can get that through is it quote, "Has to be revenue neutral." So all this spending has to be covered by taxes. Well, typically that's over a 10-year period. Well, now Biden's come up with this idea, "Hey, I'm gonna spend this money over 8 years, but we're gonna pay for taxes over 15 years." So that's how we're able to get it through. Now, once that's done, What I'm thinking that's even worse coming down the road, you think Step Act Number 1 is bad, let's wait for Step Act Number 2. And what do I mean by that?

You know, once they get the infrastructure bill through, then, because right now they're paying for that through corporate taxes, it's only corporate taxes, it has nothing to do with individuals. Now we're going to have the estate tax. You know, I think, I personally think they're going to drop the lifetime exemption down to $1 million. I don't think they're going to $3.5 million. I don't think they're going to $5 million index. I think they're dropping it to $1 million, or maybe it's $3.5 million lifetime, but your gift tax exemption is only going to be $1 million. So step back, it's $1,100,000. So, you know, that's, that's, that's where it's really going to be hammering our farmers. Instead of just paying an income tax now on a transfer, you're going to be paying an estate tax, which will be maybe 45-50% plus state.

Like my state, Washington, gonna have a 20% tax possibly on, on your inheritance or on your transfer. Um, so yeah, the STEP Act is not fun, but STEP Act— I'm using number 2 It could even be worse. We don't know what it's going to look like. I'm starting to get a pretty good idea.

Chris

Barron: Well, that's what I was getting at in that earlier question about the estate tax. I mean, that, that's where, I mean, it gets to where you almost have to sell some stuff to be able to pay the tax.

Paul

Neiffer: Yep.

Chris

Barron: Yeah.

Paul

Neiffer: I mean, no, this, this administration and the progressive Democrats, not all Democrats, but it's the progressive ones. But right now they're hammering the moderates like Manchin in West Virginia, he's getting hammered mercifully on, you know, get rid of the filibuster, we want to be able to get this through. You know, that the progressives have had a long-term goal for the last 10 or 15 years to redistribute wealth, and this is how they're going to do it. That's really what we're talking about. Now, you know, let's say, let's say it does go Republican next year. And then in 2 years after that, we have a presidential election. And let's say not Trump, it could be Trump, but Republicans get back into power. You know, it's the president's Republican, the Senate's Republican, and the House is Republican.

If this passes this year, can they go back and unwind it and make it retroactive? And the answer is yes. They've done that before. There's been in the estate and gift area, they've had the ability or they've done rules where they passed a law. Matter of fact, we had no step-up in basis for a couple years back in the late 1970s, and they went back in and made that retroactive that there was step-up in basis. So, uh, yes, they have the ability to unwind this, but we also have to understand, Chris, that taxes are sticky. Even for the Republicans, once the tax is initiated and they see that revenue coming in, right? And the Republicans, they spend almost as much as the Democrats spend. You know, that's the reality anymore, is, you know, the Republicans and Democrats on the spending side, I don't see a whole lot of difference.

Chris

Barron: No, you can't argue with that. I want to back up for a second and then we'll continue that part of the conversation, but you know, you talk about retroactive if this goes through. What about, you know, so, so for clarity here, it— this is on the 2020. This is— so can, can— there's no way that anybody can go back, or is there a way that people will go back and try to transfer, um, things into 2020 or not?

Paul

Neiffer: Yeah, yeah, you and I were talking about that a little bit offline. I, I think Technically, no, they can't. Right. But I know there's been lots of times where, you know, people say, hey, I'm going to treat it as if I transferred in 2020 or 2019 or 2018. Gift tax returns are due April 15th right now. You know, it might be safe to just go ahead and file for an extension. File your extension. That gives you clear into October 15th and And then you have to decide, okay, what are you doing? And again, that's an ethical question, and I'm not giving any advice on anything like that when it comes to ethics. That's, that's up to them.

Narrator: Yeah. This is Alyssa with the Ag View Solutions team. Here at Ag View Solutions, we work with farms and ag businesses all across the country on cost of production, business decision-making, collaboration opportunities, farm and ag business structuring, and transition planning. We work with operations of all sizes to help you with the important decisions that need to be made in your business. If you have questions or would like to learn more about how we can help your farm and business, please email us at cbarron@agviewsolutions.com, and thank you for listening.

Chris

Barron: Whenever you see, just picking on 3 names, but when you see Cory Booker and Bernie Sanders and Elizabeth Warren is just 3 of the the leaders of this, you kind of can sense what's probably there, unfortunately, and it's not good for business.

Paul

Neiffer: No. And right now they have a lot of power. You know, this is the most power I think they've ever had. Right. And they're going to take advantage of that power. And we have to look over on the Senate side. We got Senator Ron Wyden. He's the leader of the Senate Finance Committee. He's in Oregon. He was elected when I lived in Oregon, and I've been out of Oregon for 20 23 years now. Um, uh, you know, he was elected, he's very liberal. State of Oregon's very liberal. Um, you know, he wants to, what he would like to do for certain taxpayers. Now this might be for high net worth taxpayers, like maybe $50 million on up, you know, certainly billionaires, but I think I've heard $50 million. They want to assess a wealth tax, a 1 to 2% wealth tax every single year.

So if you're worth $50 million, you're going to be paying $500,000 or $1 million every single year for the privilege of having wealth. You know, so, you know, their, their goal is really to go after the Bezos and the Musk and the Gates and so on. Um, uh, but you know, if that gets through, I mean, other countries have tried this. France has tried it. It didn't work very well. Other countries have tried it. Some states have something like this for— I know Louisiana's got a sort of a tax like this on corporate capital and so on, but it's pretty minor. Yeah, this is what's coming.

Chris

Barron: Yeah, well, especially if we keep spending like we have been and the proposals. I mean, that's what's driving this. That's where, you know, to me, you connect the dots here between the the infrastructure bill and this tax proposal coming out at the same time. Weird, you know, huh? Another quick question.

Paul

Neiffer: What people— I was going to tell you what people need to understand. Our deficit right now as a percentage of our GDP is higher than during World War II. You know, that's how much money we are spending.

Chris

Barron: Right. It's astronomical. It's not even comprehensible, really.

Paul

Neiffer: No, no.

Chris

Barron: I have another quick question too, and this ties into— and, and maybe you've heard of this or not, but, um, the mileage tax. You know, they're talking about mileage as opposed to, you know, fuel tax. We're going to more electric vehicles, all that kind of stuff. You know, that's coming down the pike with semis and tractors and electronic stuff for us on the ag side down the road. What's your thought on that mileage tax? Do you think that's something that they're going to get pushed through fairly rapidly too?

Paul

Neiffer: Well, you know, so, um, oh, who was the mayor of South Bend that's now the transportation secretary? Booty jerk. Yeah, booty jerk. Forgot his name already. Uh, he came out and said that they're not going to pay for the infrastructure bill with the mileage tax. What he conveniently didn't say is we might use the mileage tax to pay for the next thing that's coming up. So I don't think it's off the table. I think what they're saying— they're doing the bait and switch. Just, they're going to say, we're not going to enact a mileage tax to pay for this bill because we know we got enough in the corporate tax, but we're going to need the mileage tax to pay for the next bill. So I, I, I think it's coming, um, you know, especially as you see electric vehicles become more and more popular.

I think, you know, the way they could get around that instead of doing a mileage tax is you just say if you own an electric vehicle, you're going to pay a $500 or $1,000 a year excise tax. I mean, so how are they going to keep track of this? I mean, what they're going to start doing is there's going to be a chip in your car. It's going to be tied to your Social Security, and then they're going to send you a bill. You know, how are they going to do this? You know, that's It's sort of getting a little bit 1984 or Orwellian going on here, but that's the reality. They got your cell phone right now anyway, right? And they know how many miles you go just with your cell phone.

Chris

Barron: Well, as soon as we get the COVID passports and everything, we can just track us all the time. But so we're talking, you know, the income tax side of things too. Any comments on that? You know, the $400,000, not going to raise the taxes unless you're over $400,000. Anything there that applies to agriculture, us as producers, that we need to be aware of in that conversation?

Paul

Neiffer: Well, yeah, I think, I think what we need to be aware of, and this is me surmising, so this is my crystal ball which might be pretty cloudy, is if you are structured as an S corporation or a partnership, an LLC taxed as a partnership, the days of being able to reduce your self-employment tax or your payroll taxes because you've restructured from being a Schedule F farmer over to that. Those days are probably rapidly coming to a close. I'm thinking even possibly this year. What Biden wants to propose is if your earned income, so your Schedule F income or your wages, whatever it is, if your earned income is over $400,000, then that excess is subject to the extra 50— well, it's actually 16.2%, uh, self-employment tax or payroll tax. Um, that's, that's his proposal. So between about $142,000 and $400,000, you're only subject to either 2.9% Medicare or 3.8% Medicare tax.

And then once you go above $400,000, because what they want to say is we're not going to raise income taxes if your net income, your taxable income is $400,000. But remember, earned income can be over $400,000 and your taxable income is still going to be under $400,000. And it's much easier for them to say, hey, it's only for rich people, you know, they're going to pay that extra 16.2% tax. Um, matter of fact, I was telling you offline, you know, if this goes through, very easily for higher income earners in that $400,000 range, which, you know, these days isn't necessarily that high, right? Uh, your marginal tax rate, once you factor in the state rate, self-employment tax, and the income tax, you're approaching 65%. You know, that's going to be the highest rates that we've had in the last 40 years. Uh, you know, the last time we had rates over 50% at the federal level was 1983.

I think we had 70% on unearned income. So, you know, this is getting to the point where if the tax rate gets that high, the incentive to grow, the incentive to create wealth, it's just not there as much as it was. And I think hopefully, you know, there's enough people in Congress on the Democratic side that can temper all of these proposals. And I think maybe they can, but I'm not counting on it.

Chris

Barron: Well, part of the problem, it just still comes back to the spending side of it. You know, we do have to, if we are going to spend, we do got to pay for it. So we got to figure out how we balance all this. That's, that's the real conundrum here.

Paul

Neiffer: Um, so we've talked, and their assumption too, their assumption too, is that interest rates weren't going to go up. Well, we've already seen almost a doubling of the 10-year rate, right? We start getting some inflation, you know, that rate on 10-year T-bonds is going to be 4%, 5%, 6%. You and I, it wasn't too many years ago where we were paying 8%, 10%, 12% on interest, you know, back before 2008.

Chris

Barron: Right. Yep. Well, and we've— so we've touched on the income side of it. We've touched on the gift side of it. We've touched on this concept of transfer, either pre- or post-death, and then the the whole idea of trusts and the estate tax. Is there anything else that we haven't touched on? And then I got a kind of a wrap-up question here for you. Anything else we haven't?

Paul

Neiffer: Yeah, no, I think we've covered it. I mean, this is, like I said, this is the worst piece of legislation I think I've seen in my almost 40-year career. You know, it's just, Yeah, and like I say, if this is a normal year, this would have no chance of ever passing. No chance at all. But this is not a normal year.

Chris

Barron: Well, and the infrastructure bill wouldn't have a chance of passing, so you wouldn't be spending that money either, right?

Paul

Neiffer: Yep, exactly.

Chris

Barron: I mean, they got—

Paul

Neiffer: but even if they weren't spending the money, they would be coming up with reasons why we need this because, you know, equity, uh, you know, we need to, uh We need to redistribute wealth the way it needs to be. You know, America, we've, we've, we've, you know, we've discriminated against everybody that, you know, that might have been discriminated against. And this is a way to create equity, not equitable, but equity. So that's, that's the term they use now.

Chris

Barron: Yeah. Problem with socialism, eventually you run out of other people's money. Eventually here is the problem. Yeah.

Paul

Neiffer: Yeah, exactly.

Chris

Barron: My last sort of question here is, you know, you and I are essentially having a conversation here about a proposal, and, you know, hopefully there's some amendments here and there's some common sense. And like you said, there's a lot of Democrats out there that aren't as progressive, that understand business better than some others, that hopefully, you know, we can talk sense into. So aside from us talking to our our congressmen, our senators, and those types of things and have those conversations. As producers, is there anything from your perspective looking at it that makes sense for us to be planning, doing, working on, paying attention to? I mean, obviously we'll stay in touch with you and, and we'll stay tuned, but anything in the meantime, anything we need to be thinking about or anything we can do?

Paul

Neiffer: Yeah, I think this is— I hate to say it, but I think the wisest thing right now is a little bit of wait and see. It would be difficult to give any advice right now because it is so uncertain. You know, even last year we're saying, well, do we make gifts? Well, you know, the idea of making gifts, major gifts, is that's a very certain— and you technically have gifted your wealth to your kids, and that isn't always what we want to do. 'Cause, you know, kids don't always watch out for the parents the way the parents think they're gonna watch out. So we always have to worry about that. So I think right now we have a 3 to 6 month window. We're gonna get a better idea as to what the reality is. And then at that point, I think we will, there'll still be things that we can do. Maybe a lot of these trusts will get unwound.

You know, to me, that might be one thing that you're gonna see a lot of now. They put, may put language in there that you may just say, hey, if they're gonna tax this trust every 21 years and I know I'm gonna live for another 60 or 70 years likely, why do I wanna have it in a trust? It's just better to run it through my estate and do it once every 60 or 70 or 80 years instead of every 21 years. And just because you set up an irrevocable trust, all the beneficiaries can get together and say, hey, we wanna terminate this trust. So there is no such thing as an irrevocable trust in my opinion.

Chris

Barron: Right. Yeah. Anything can be fixed later. You know, anything that has a beginning has an end.

Paul

Neiffer: So yeah. And then the other thing too is, yes, this could be passed, but if the groundswell is so great that I think it would be, yeah, probably within 5 or 10 years they'll probably get unwound. At least parts of it will get unwound. But my concern is Everybody said when the Republicans are going to get control, you know, ACA was going to disappear. What's happened with ACA? It's still there. They had a couple tweaks by the Republican, but that was it.

Chris

Barron: Mm-hmm. Yep. Well, and like you said, that the scary thing is just that estate value. If you take that down to like a million dollars, like you're saying, that's really the scary part. That's where people have to start making sales to just pay the tax. So, and it's going to make it really tough for us farmers. Yeah, yeah, I do too. I definitely hope you're really screwed up on this one and just don't know what you're talking about here. I hope so.

Paul

Neiffer: Yeah, and that could be true, that could be true.

Chris

Barron: I don't know, it's, uh, it's something that hopefully the idea here is, is to, you know, always with the podcast is to bring perspective and, and have people, you know, be looking at things with wide open eyes and, and hopefully We can all have conversations with our leaders and, you know, explain to them what's going on. And agriculture is a little different from the standpoint of how capital intense this industry is. And they're not, you know, they're not making more land and they're not making really more farmers. I mean, there's gonna be less of us trying to do more on a lower margin, it seems like every year. And commodity prices are good now, but they do ebb and flow. And so we got to really pay attention.

Paul

Neiffer: Yeah, and I think part of this too is maybe a little bit of a backdoor approach to eliminate the benefit of cash method of accounting. What do I mean by that? You know, certainly on the trust side, if you have to revalue everything every 21 years, you know, they're going to get their tax. At least they know they're going to get their tax every 21 years. If you want to transfer you know, items that have zero cost basis like grain and so on to your kids. They're going to start saying, hey, you can do that, but you're paying a tax. So that, that's sort of what I think is happening.

Chris

Barron: Yeah, yeah. Well, uh, my last, last question then: when are you going to get, uh, out of Washington State and get over here to Iowa and help us plant some corn?

Paul

Neiffer: I, I may, because of the fact that, you know, the tax due date is now May 17th. I'm not sure if I can plant corn, but I can certainly come out and drive tractor on something. I know there'll be something you can have me drive a tractor on. And, and actually, I know already that I'm making a trip to D.C. toward the end of May for, for sure. So, uh, I may just have to stop in Iowa on the way to D.C.

Chris

Barron: Yeah, yeah, do it both ways because I want to hear how you made out when you're in D.C. So Maybe, maybe some of us will have to come along with you so we can get some voices out there. But, but hey, exactly, I think this was a really good conversation. I think the, the final message is for everybody, stay tuned. We'll, we'll continue to, as things adjust and change and, and become a little bit more clear, we'll definitely stay in touch, won't we, Paul?

Paul

Neiffer: Yep, we will for sure.

Chris

Barron: So sounds good. Well, hey Paul, really appreciate it as always. You do a phenomenal job. You know, the FarmCPA, if anybody hasn't been online, Paul has 2 or 3 here recent columns that he's written on kind of on these topics where if you want to go in there and read those too, they're really good. And again, Paul, thanks a lot. Really appreciate your time today.

Paul

Neiffer: No problem. Thanks, Chris.

Chris

Barron: You bet. Thanks everybody for listening, and we will catch you again next time on the Ag View Pitch.