OKLAHOMA CITY (AP) -- Farmers and ranchers who sell their operations, including their houses, would get a capital gains tax break under a measure introduced in the U.S House Wednesday by Rep. Wes Watkins.
Watkins, R-Okla., said farm lands are subject to the capital gains tax when they are sold along with the primary home, but he wants to change that. A couple filing jointly gets a $500,000 exemption from the tax if they sell their primary home, he said. The measure would include the adjoining farm land with the primar yhome exemption.
Watkins said the current tax policy is a heavy burden on agricultural families. He said many farmers -- especially those who inherit farms -- are in "economic quicksand," not able to afford the high price of running their operations but also reluctant to sell for fear of the large capital gains tax they would incur.
"If your grandfather originally paid $100 an acre for your family's 1000-acre farm, and it's worth $500 an acre today, that's a $400,000 taxable capital gain if you sell under the current law," Watkins said.
Watkins did not make an estimate of how much his proposal would cost the federal government.