By Dane Diehl
I grew up on a family farm alongside my brothers, spending long days working the land and learning firsthand what it takes to keep a farm running. Like many kids raised in agriculture, we loved the work and the lifestyle, but we also understood something else: There was no guarantee there would be room for all of us to return.
For many young farmers today, uncertainty still exists. High land values, rising input costs and tight margins can make it difficult for the next generation to step into agriculture, even when the desire and work ethic are there. If Missouri wants to keep family farms strong, we must ensure public policy, especially tax policy, helps open the door for young producers rather than unintentionally closing it.
Beginning Farmer Tax Deduction Program
One step Missouri has taken in the right direction is the Beginning Farmer Tax Deduction program. The program was stood up by legislation I helped pass and is designed to encourage farmland owners to sell or lease land to beginning farmers by offering tax deductions tied to those transactions. Under the program, landowners who sell farmland to a beginning farmer or eligible family member may deduct a portion of the capital gains from their Missouri adjusted gross income. The deduction begins with 100% of the first $2 million in calculated state capital gains and gradually decreases additional amounts, helping make generational land transfers more financially feasible.
The program also recognizes that not every transition happens through a sale. Many young farmers start by renting or entering into cropshare agreements. Landowners who rent, lease or enter into crop-share agreements with a qualified beginning farmer may deduct income received under those agreements, up to $25,000 per year, from their Missouri adjusted gross income.
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