Corn with two hundred dollar bills on topA federal plan to increase high-bracket taxes on things like capital gains and eliminate the ability to avoid taxes on gains by passing assets to heirs — also known as stepped-up basis — won’t affect family farmers as bad as feared leading up to Wednesday’s announcement of the American Families Plan. Currently, stepped-up basis allows farm owners to pass on assets to successors at current market value. Biden Administration officials said Wednesday that won’t change, and operating heirs still won’t pay capital gains taxes on those assets if they’re used on the farm. If those assets are sold as part of an inheritance, however, they will still likely be subject to those taxes. In general, the plan would raise the capital gains tax rate from 20% to 39.6% for individuals with an adjusted gross income of greater than $1 million/year. Farm groups say farm heirs will still face mounting tax burdens from the plan — which also limits IRS Section 1031 tax deferrals, commonly used in farmland transactions, to $500,000 — if they intend to sell some assets as part of a farm succession plan. See more about the plan and reactions from farm leaders.