MMM 355August 11, 1997

Farmer Highlights Of The Budget/Tax Bill

H.M. Harris, Jr., Extension Ag. Economist



The new tax and budget bill recently passed by Congress contains several features of interest to farmers:

.....The estate tax exemption for family farms is raised from $600,000 to $1,300,000 on January 1, 1998. For the rest of us, the exemption is raised to $1,000,000 over a 10 year period.

.....At least through 1999, farmers will be able to income-average over a three-year period.

.....Self-employed health care premiums will be deductible at 40 percent in 1997, 45 percent in 1998 and 1999, gradually increasing to 100 percent in 10 years.

.....Current exemption on ethanol from federal excise tax is extended to the year 2000.

.....The language for farmer use of deferred price contracts in which grain is delivered in one tax year, and paid for in another is clarified.

.....The capital gains tax is lowered from 28 percent to 20 percent for taxpayers in the highest income brackets. Taxpayers in lower brackets will get even lower rates. The bill increases the time an asset must be held to be eligible for capital gains treatment from 12 months to 18 months.


THE CLEMSON UNIVERSITY COOPERATIVE EXTENSION SERVICE OFFERS ITS PROGRAMS TO PEOPLE OF ALL AGES, REGARDLESS OF RACE, COLOR, SEX, RELIGION, NATIONAL ORIGIN, OR HANDICAP AND IS AN EQUAL OPPORTUNITY EMPLOYER.
COOPERATIVE EXTENSION WORK IN AGRICULTURE AND HOME ECONOMICS--STATE OF SOUTH CAROLINA, CLEMSON UNIVERSITY, U.S. DEPARTMENT OF AGRICULTURE, AND SOUTH CAROLINA COUNTIES COOPERATING.

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updated 8/15/97