LAKELAND, FL – A new federal tax package, part of the “One Big Beautiful Bill Act,” brings key changes for U.S. farmers and rural business owners. According to AgAmerica Lending, the legislation permanently raises the federal estate tax exemption to $15 million per individual beginning in 2026, with annual inflation adjustments. It also preserves the stepped-up basis provision, reducing capital gains taxes for heirs selling inherited farmland.
The bill introduces a four-year capital gains installment option for sales of farmland to active farmers. Additionally, the Section 179 expensing limit has been raised from $1.22 million to $2.5 million, and 100% bonus depreciation is now permanently restored for equipment placed in service after January 19, 2025.
Farmers operating under pass-through entities like LLCs and S-Corps will continue benefiting from the now-permanent 20% Qualified Business Income Deduction. Property eligible for expensing includes barns, grain bins, greenhouses, and other farm-use structures.
Biofuel producers gain from an extension of the 45Z Clean Fuels Production Credit through 2029, limited to feedstocks from North America. New emissions-based rates also support producers using animal manure, while solar and wind credits will phase out starting in 2027.
Other provisions include a permanent Paid Family Leave credit, a renewed New Markets Tax Credit, and immediate expensing of R&D costs. AgAmerica encourages producers to reassess estate plans, entity structures, and capital investment strategies to maximize benefits under the new law.