CLA’s Hesse Advises Congress on Estate Tax and Interest Expense Deductions
Download Hesse’s testimony: Written Testimony to House Committee on Agriculture
Minneapolis — April 28, 2017 — Chris Hesse, principal in the national tax office of CliftonLarsonAllen (CLA), testified at the full United States House Committee on Agriculture in early April to inform them on the most critical tax provisions used by farmers. His full written testimony included material on a variety of tax issues vital to agribusiness, including crop insurance, tax-deferred exchanges, and bonus depreciation.
Members of Congress questioned Chris on the estate tax and interest expense deductions. He explained that because farming is so capital intensive, farm interest expense deductions are important. He went on to demonstrate how farmers spend unnecessary time and money planning for the estate tax so that they don’t have to sell off their land when a family member dies.
Trump’s tax plan
On Wednesday, April 26, President Trump released a summary of his tax proposal. Hesse notes that there are many unanswered questions regarding the proposal. For example, business income is proposed to be taxed at 15 percent. But what constitutes business income? Will income from a rental activity be considered business income? What part of business income will be considered compensation for personal services — and will it be subject to the lower rate?
“We’re a long way from having specifics,” Hesse observed. “At this point, it’s a skeleton. We need to learn the details of the tax plan — what are the meat, muscles, and organs that make it breathe?”
As Hesse spoke to the Committee, he shared his knowledge on the distinctive challenges facing our farmers as they provide food for the United States and the world. Fluctuations in weather, production, demand, and disease place agribusiness at unique risks. Throughout history, various tax provisions have been enacted to help mitigate the risks for farmers. As the President and Congress craft a new tax plan, CLA will continue to educate our leaders on the effects of tax provisions on farmers and ranchers.
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