Thoughts on the capital gains tax being backdated to April 2021? Do you think it will happen? Does anyone know when the senate will be voting on this? This increase from 20 to 39 percent will change the course of so many of my transactions (some not real estate related). Any insight/opinions appreciated!!
Too early to tell. Neither party really has the ability to fully control the agenda so both are going to need to accept some significant compromise positions, and where that will fall is at this point just a pure guessing game.
Do you know if there is a deadline the senate has to vote by?
@Dilini Sundaram revenue raisers were removed from the infrastructure bill. That means there will be a separate budget bill later this year that will go through reconciliation. Although this means it will be unilateral with just democrats, it will still be highly negotiated and will take time. The closer to the end of the year this process moves the more likely it is this will start next year. Further it is very likely that the 39% rate proposed will decrease to something more like 25% or 28%.
My personal expectation is that any revenue raising legislation will have an effective date of whenever the bill is signed into law.
It's really anyone's guess, however deeply retroactive legislation that raises taxes is debatedly unconstitutional under the due process clause of the fifth amendment, and to a lesser extent other clauses.