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All Wealth Belongs to the State - Estate Tax Edition
Posted on: March 24, 2021 at 09:44:00 CT
ummmm MU
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Estate tax rules
Biden has also proposed changing rules around wealth transfers, like with the estate and gift tax.
Current law lets heirs receive an asset such as a stock or home at its current market rate (rather than the original owner’s cost) courtesy of a “step-up in basis” at death.
That allows the heir to sell the asset without paying tax on the appreciation over the owner’s life.
On the campaign trail, Biden said he’d eliminate the step-up in basis.
He’d also reduce the amount individuals can transfer without paying estate and gift taxes, to $3.5 million in bequeaths at death and $1 million in lifetime gifts. There’s also a chance Biden may raise the tax rate from the current 40%, said Bruce Steiner, an attorney at Kleinberg, Kaplan, Wolff & Cohen.
The Tax Cuts and Jobs Act raised the tax-free threshold to $11.7 million for individuals in 2017. That threshold will revert to the pre-TCJA caps in 2026, due to sunset provisions baked into in the law.
That means more estates (those over about $5.5 million for individuals) will automatically be subject to taxes on wealth transfers in a few years.
“If Congress can’t agree on anything, that’s what would happen anyway,” Steiner said.
https://www.cnbc.com/2021/03/23/heres-how-democrats-want-to-raise-taxes-on-the-rich.html
Biden has also proposed changing rules around wealth transfers, like with the estate and gift tax.
Current law lets heirs receive an asset such as a stock or home at its current market rate (rather than the original owner’s cost) courtesy of a “step-up in basis” at death.
That allows the heir to sell the asset without paying tax on the appreciation over the owner’s life.
On the campaign trail, Biden said he’d eliminate the step-up in basis.
He’d also reduce the amount individuals can transfer without paying estate and gift taxes, to $3.5 million in bequeaths at death and $1 million in lifetime gifts. There’s also a chance Biden may raise the tax rate from the current 40%, said Bruce Steiner, an attorney at Kleinberg, Kaplan, Wolff & Cohen.
The Tax Cuts and Jobs Act raised the tax-free threshold to $11.7 million for individuals in 2017. That threshold will revert to the pre-TCJA caps in 2026, due to sunset provisions baked into in the law.
That means more estates (those over about $5.5 million for individuals) will automatically be subject to taxes on wealth transfers in a few years.
“If Congress can’t agree on anything, that’s what would happen anyway,” Steiner said.
https://www.cnbc.com/2021/03/23/heres-how-democrats-want-to-raise-taxes-on-the-rich.html
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All Wealth Belongs to the State - Estate Tax Edition - ummmm MU - 3/24 09:44:00
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