Farmers wife and death of farmer

[JenMO]

Farmer dies, does farmers wife inherit 1/2 market value of the cows and machinery? I believe any calves or grain would be sold on the farm schedule as it always had been--regular income and subject to SE tax for her. Is my thinking right?

[Gretel]

Sep up basis depends on who owned the farm.

[kathyc2]

Farmer dies, does farmers wife inherit 1/2 market value of the cows and machinery? I believe any calves or grain would be sold on the farm schedule as it always had been--regular income and subject to SE tax for her. Is my thinking right?

"Remember that this step-up applies to harvested grain that has not been sold. If you have sold the grain on a deferred payment contract and have not received the cash yet, this does not get a step-up since it is considered “income” and income items do not get a step up." According to http://www.farmcpatoday.com/2013/02/...n-basis-works/

Just a guess, but I would think that if the calves are sold shortly after death the treatment would be the same as harvested grain, but if they are held and fed out they would not get step up as like unharvested grain they are essentially work in progress.

If you find something definitive please post.

[TAX4US]

A farm expert told me that Stock cows received step up but not the saleable calves which would have no basis so to speak. All equipment would also get stepped up and start new depreciation as of date of death. What do you think given this info?

[kathyc2]

This: always has a chapter on ag. May be something in there you can use.

[JenMO]

what year workbook from Il tax school?

[JenMO]

also, husband and wife owned farm. but farming operations only have one owner, but many wives put in as much work. I believe the machinery and stock cows would receive 1/2 stepped up basis, along with the farmland

[kathyc2]

what year workbook from Il tax school?

Every year has a chapter on ag. I don't know, but there may be a section in one of them relating to inheritance. Farming tax is really a specialized knowledge subset that I've never really gotten into. Purdue U used to do several ag tax seminars, but I see they have moved it to a webinar if you're interested: Ag is the last one on list.