Summary of HRES 206: Recognizing the Importance of Stepped-Up Basis

Bill Number: HRES 206

Introduced: March 10, 2025

Status: Submitted in House

Classification: Resolution

Purpose and Intent

HRES 206 aims to underscore the significance of the stepped-up basis provision under Section 1014 of the Internal Revenue Code of 1986. This provision allows for the adjustment of the tax basis of inherited property to its fair market value at the time of the owner's death. The resolution emphasizes the role of this tax policy in preserving family-owned farms and small businesses, particularly during generational transfers.

Key Provisions

The resolution includes the following key points:

1. Support for Stepped-Up Basis: The House of Representatives expresses its support for maintaining the stepped-up basis, recognizing its importance in facilitating the transfer of family-owned businesses and farms without imposing undue tax burdens.

2. Opposition to New Taxes: The resolution explicitly opposes any proposals that would introduce new taxes on family farms or small businesses, advocating for the protection of these entities from additional financial pressures.

3. Recognition of Generational Transfers: It acknowledges the critical role that generational transfers play in the continuity and sustainability of family-owned operations, highlighting the need for policies that support these transitions.

Impact

The resolution is intended to benefit:

• Family-Owned Farms: By preserving the stepped-up basis, family farms can transfer ownership to the next generation without incurring significant tax liabilities that could jeopardize their operations.

• Small Businesses: Similar to farms, small businesses would be protected from new tax burdens that could arise during ownership transitions, ensuring their viability and economic contribution.

• Legislative Landscape: The resolution serves as a formal statement of intent from the House, potentially influencing future legislative discussions and decisions regarding tax policy as it relates to family-owned enterprises.

Legislative Actions

• March 10, 2025: The resolution was referred to the House Committee on Ways and Means for further consideration.

Sponsors

The resolution is sponsored by a bipartisan group of representatives, including:

• Primary Sponsor: Tracey Mann
• Cosponsors: Nathaniel Moran, Ann Wagner, Robert E. Latta, Claudia Tenney, Randy Feenstra, Tom Cole, Derek Schmidt, Adrian Smith, Keith Self, Gabe Evans, Russ Fulcher, Charles J. "Chuck" Fleischmann, Michael Guest, Angie Craig, Sam Graves, Jim Costa, Frank D. Lucas, Jimmy Panetta, John W. Rose, Darin LaHood, Barry Moore, Derrick Van Orden, Mary E. Miller, Mark Alford, Brad Finstad, Dan Newhouse, John R. Moolenaar, Daniel Meuser, Elise M. Stefanik.

Conclusion

HRES 206 serves as a significant resolution aimed at preserving the stepped-up basis, which is crucial for the sustainability of family-owned farms and small businesses. By opposing new taxes and recognizing the importance of generational transfers, the resolution seeks to protect these vital components of the economy.