Wine Continued from Page 6
found that consuming one drink per day slightly increased the risk of tubercu- losis and breast cancer, while it slight- ly decreased risk of diabetes and heart disease. The data for “all attributable causes” of mortality showed almost no discernable risk related to consuming one drink per day. In the study’s findings, the authors wrote, “The level of consumption that minimizes health loss due to alcohol use
is zero.” And they advised governments to revise public health policies to “lower population-level consumption.” For decades, wine enjoyed a reputation for having positive health benefits when consumed in moderation. Now, wine- makers and industry leaders fear they are losing the war around health messaging. “It is the No. 1 issue facing the wine busi- ness globally,” Fredricks said. “We’ve got to coordinate efforts against this anti-alcohol
force and this narrative.” Brager echoed that message. “It’s really critical that our industry fights back at an industry level effectively and with urgen- cy, ensuring that findings are transparent, they’re fair, unbiased and they’re based on sound science,” he said. Health concerns around alcohol have combined with demographic shifts, in- flation, cannabis legalization and other factors to create a challenging market for winemakers. The reduced demand and excess inven- tory impact California winegrape growers. In 2023, wineries placed smaller or- ders from vineyards and waited until later in the season to purchase grapes on the spot market, according to indus- try experts. As long as supply exceeds demand, “growers are going to see increased pres- sure on price, increased quality standards, all the while we’ve got to deal with de- creased margins from the last few years,” Fredricks said. To remedy the situation—and to combat the negative health narrative around alco- hol—winemakers are looking to market wine more successfully to younger con- sumers and are working to develop new products, including low-alcohol and non- alcoholic wines. Meanwhile, industry leaders have en- couraged growers to reduce the winegrape supply. “We have unwanted production that’s out there in the ground,” Jeff Bitter, president of Allied Grape Growers, said at the symposium. Bitter advised growers to tear out tens of thousands of acres of winegrapes state- wide. He estimated it would take three years of vineyard removals to achieve market balance. “The reality is that we’ve got declining demand,” Bitter said. “The wholesaler has got too much inventory and the retailer has too much inventory, so everything gets pushed back.” (Caleb Hampton is an assistant editor of Ag Alert. He may be contacted at champton@cfbf.com.)
“Unfortunately, the science of wine and health is nuanced and complex and doesn’t fit the same sound bites as the anti-alcohol forces,” Steve Fredricks, president of Turrentine Brokerage, said at the symposium. Critics of the 2018 study—and of the public health response to it—argue that its authors overstated the risks associ- ated with moderate drinking. The study
Avoid Capital Gains Tax When Selling Your Real Estate
We will be at the World Ag Expo February 2024. Look for us in Pavilion A, Booth 1329.
Consider a charitable remainder trust (CRT) with City of Hope® if you would like to:
• Sell your property and bypass capital gains tax on the transfer. • Receive lifetime income for yourself and/or other beneficiaries. • Receive a charitable income tax deduction.
• Explore an alternative to a 1031 exchange. • Convert a nonincome producing property, such as a parcel of land or second home, into a lifetime income stream. • Have the peace of mind of no longer managing your property.
A CRT trust can be established with appreciated real estate, such as agricultural, residential, vacation, commercial and multifamily properties, and is an investment vehicle that is approved by the IRS.
EXAMPLE: CHARITABLE REMAINDER TRUST VS. OUTRIGHT SALE COMPARISON
OUTRIGHT SALE
CHARITABLE REMAINDER TRUST
Sales Price
$4,000,000 ($200,000) $3,800,000 ($983,970)* $2,816,030**
$4,000,000 ($200,000) $3,800,000
Sales Cost (5%) Net Proceeds
Estimated Capital Gains Tax
-
www.californiabountiful.com LOCAL STATIONS KOTR/My11 Salinas/Monterey Sat. 5 p.m. KSBY/6 Santa Barbara/ Sat. 6:30 p.m. San Luis Obispo KVPT/18 Fresno/Visalia Sun. 11:30 a.m. SATELLITE TV RFD-TV: Dish Ch. 231, DirecTV Ch. 345 Sun. 8 a.m.* A Farm Bureau Production
Sale Proceeds
$3,800,000
Charitable Income Tax Deduction
$1,225,480***
- -
Net Annual Income
$190,000****
*Estimated blended Federal/CA Long-Term Capital Gains Tax Rate of 33.93%. Estimated cost basis is $900,000 with an estimated capital gains tax of $983,970. **The estimated proceeds from the outright sale are net of the estimated $983,970 capital gains tax liability incurred by the outright sale. ***The charitable deduction is based on the appraised value at the time of the transfer into a CRT and may be used to offset tax liability in the year of the gift. Any unused portion can be carried forward for up to five years. ****Estimated first full year’s income, based on a fixed rate of 5% of the CRT’s annual fair market value The figures contained herein are for illustration purposes only and should not be considered legal, accounting or professional advice. Your actual benefits will vary depending on several factors, such as age, timing of gift and value of your property.
To learn more, contact Michael Rorman or another member of our team at 800-232-3314 or plannedgiving@coh.org . City of Hope’s expert Planned Giving team has helped many people create charitable trusts and generate significant tax savings and income benefits.
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8 Ag Alert February 7, 2024
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