Thursday, June 3, 2021 / by Carol Glover
The incoming administration did not take long after the election to propose some sweeping tax increases.
Please see the link blow to the Investopedia article that we located that contained what we consider a comprehensive and clear list of points in Biden’s proposal. We encourage you to do your own research, contact your CPA, financial advisor and/or estate planning attorney.
Here is a brief summary of a few of the proposed changes that will impact estate and gift planning and real estate:
· Increasing the ordinary income and capital gains rates;
· Drastically reducing the estate and gift tax exemptions;
· Restricting the use of generation skipping transfers;
· Eliminating the step-up in basis upon death;
· Reducing the availability of the 1031 exchange.
We do not have a crystal ball, but we believe that it is likely that an increase in ordinary income and capital gains rates will occur and reduction in the estate/gift exemption amounts. It is just a matter of how many of the proposals will prevail, in what form, and when they will be effective. The current proposals are for a general effective date of January 1, 2022. However, again, be vigilant, be informed and consult your advisor. If you would like to discuss these prospective changes and the potential impact on real estate investing and sales and/or want a referral to a professional advisor, call us!!