Recognizing the importance of stepped-up basis under section 1014 of the Internal Revenue Code of 1986 in preserving family-owned farms and small businesses.

Bill Number

H.Res. 206

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Taxation

Status

Introduced

Latest Action

2025-03-10: Referred to the House Committee on Ways and Means.

Last Updated

2026-05-07T14:00:38Z

AI-Generated Summary

Purpose

This House Resolution (H. Res. 206) aims to affirm the value of the "stepped-up basis" rule in U.S. tax law, which helps protect family-owned farms and small businesses during generational transfers of ownership. The stepped-up basis is a tax provision that allows heirs to reset the original purchase price (cost basis) of inherited assets—like land or equipment—to their current market value, reducing potential capital gains taxes if sold later.

Key Provisions

• Background Clauses ("Whereas"):
• Explains that stepped-up basis under Section 1014 of the Internal Revenue Code adjusts the cost basis of inherited assets to fair market value.
• Notes that 98% of farms are family-owned (per U.S. Department of Agriculture) and 19% of all businesses are family-owned (per Small Business Administration).
• Cites a Department of Agriculture study showing that 66% of midsized farms would face higher taxes without stepped-up basis.
• Highlights its role in succession planning for family farms and small businesses.
• Warns that removing it could hinder generational transfers for farmers, ranchers, agribusinesses, and small business owners.
• Resolved Actions:
• Supports keeping the stepped-up basis intact.
• Opposes any new taxes targeting family farms or small businesses.
• Acknowledges the critical role of passing farm and family business operations to the next generation.

Significant Changes to Existing Law

This is a non-binding resolution, so it introduces no changes to current law. It expresses congressional sentiment without enacting, amending, or repealing any statutes. It was introduced on March 10, 2025, and referred to the House Committee on Ways and Means for review.

Potential Impacts

• On Citizens: Could indirectly support family farmers and small business owners by signaling opposition to tax reforms that might increase inheritance-related taxes, potentially easing succession and reducing financial burdens during ownership transfers.
• On Government Agencies: No direct operational changes, but it may influence the Internal Revenue Service (IRS) or Department of Agriculture in policy discussions around tax code interpretations or future budget proposals.
• On International Relations: Minimal to none, as it focuses on domestic U.S. tax policy for family enterprises.
• Overall, the resolution has symbolic weight, potentially shaping public and legislative debates on estate and capital gains taxes without immediate enforceable effects.

Main Stakeholders Affected

• Family-Owned Farms and Businesses: Primary beneficiaries, including farmers, ranchers, and small business owners who rely on generational transfers.
• Heirs and Successors: Individuals inheriting assets, who could face higher taxes without stepped-up basis.
• Agricultural and Business Communities: Supported by groups like the U.S. Department of Agriculture and Small Business Administration, with bipartisan cosponsors from rural and agricultural districts.
• Taxpayers and Policymakers: Broader impact on those advocating for or against tax code reforms.

Notable Legal, Constitutional, or Political Implications

• Legal: Reinforces the status quo of Section 1014 without challenging its constitutionality; it could serve as a reference in future court cases or IRS guidance on inheritance taxes.
• Constitutional: No direct implications, as it aligns with Congress's authority over taxation under Article I, Section 8 of the U.S. Constitution.
• Political: Demonstrates bipartisan support (introduced by Rep. Mann with cosponsors from both parties, many from farm states) for protecting rural economies. It may pressure lawmakers to avoid altering stepped-up basis in broader tax reform efforts, such as estate tax changes, and highlights tensions between wealth transfer policies and economic preservation goals. As a resolution, it carries persuasive rather than mandatory force.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Mann, Tracey [R-KS-1]

Cosponsors (29)

Rep. Costa, Jim [D-CA-21], Rep. Panetta, Jimmy [D-CA-19], Rep. Craig, Angie [D-MN-2], Rep. Smith, Adrian [R-NE-3], Rep. Finstad, Brad [R-MN-1], Rep. Feenstra, Randy [R-IA-4], Rep. Meuser, Daniel [R-PA-9], Rep. Latta, Robert E. [R-OH-5], Rep. Fulcher, Russ [R-ID-1], Rep. Wagner, Ann [R-MO-2], Rep. Tenney, Claudia [R-NY-24], Rep. Newhouse, Dan [R-WA-4], Rep. Fleischmann, Charles J. "Chuck" [R-TN-3], Rep. Alford, Mark [R-MO-4], Rep. Moolenaar, John R. [R-MI-2], Rep. Graves, Sam [R-MO-6], Rep. Lucas, Frank D. [R-OK-3], Rep. Self, Keith [R-TX-3], Rep. Guest, Michael [R-MS-3], Rep. Schmidt, Derek [R-KS-2], Rep. Miller, Mary E. [R-IL-15], Rep. Rose, John W. [R-TN-6], Rep. Cole, Tom [R-OK-4], Rep. Moore, Barry [R-AL-1], Rep. Van Orden, Derrick [R-WI-3], Rep. LaHood, Darin [R-IL-16], Rep. Evans, Gabe [R-CO-8], Rep. Moran, Nathaniel [R-TX-1], Rep. Stefanik, Elise M. [R-NY-21]

Recent Actions

• 2025-03-10: Referred to the House Committee on Ways and Means.
• 2025-03-10: Submitted in House
• 2025-03-10: Submitted in House

Bill Versions

• Recognizing the importance of stepped-up basis under section 1014 of the Internal Revenue Code of 1986 in preserving family-owned farms and small businesses. — issued 2025-03-10 — PDF (2 pages)