Beth Kaufman Comments on Biden's New Tax Proposal in WSJ
A landmark proposal in President Biden’s newly announced American Families Plan would end the longstanding tax exemption for investment appreciation when a taxpayer dies. This break is known as the “step-up in basis,” and changing it could raise taxes at death significantly for affluent Americans.
Under Mr. Biden’s proposal, the untaxed gains on investments held at death—such as stock, land, or a home—would likely be taxed at a top rate of 39.6%, above an exemption of $1 million per individual, plus $250,000 more for a home. For married couples, the total exemption would be doubled, to up to $2.5 million of gains.
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With a rocky road ahead for the proposals and key details missing, estate planners are advising many clients to sit tight and not panic.
“We are a long way from passage, and the one tax certainty is that rates change every few years. I’m not recommending sales of long-term assets yet,” says Beth Kaufman, a former Treasury Department estate-tax attorney now at Caplin & Drysdale.
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