Biden Administration’s Capital Gains

[Shanna Vataj]

Interested to see how other investors are mentally and physically preparing for a reversal of 1031 exchanges. How are you altering your future estate plans if this goes through?

Investors currently pay a 23.8% top rate on long-term capital gains if held in a taxable account for more than a year. If held shorter than a year it is already taxed as regular income. Now - The White House plan would instead tax capital gains as ordinary income, at a top proposed rate of 43.4% (including medicare tax). It would apply to those with more than 1min income.

Biden also proposed eliminating an existing tax break at death (the "step-up" in basis) that allows appreciated assets to pass to heirs tax-free.

Tax plan fact sheet- https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/28/fact-sheet-the-american-families-plan/

Article - https://www.cnbc.com/2021/05/28/biden-budget-reiterates-top-capital-gains-tax-rate.html