Displaying items by tag: capital gains
The House Democrats’ update of the Biden Administration’s tax proposal hit airwaves yesterday, and it is just now starting to sink in. One of the elements that was immediately apparent to one senior tax professional was that the updated capital gains tax proposal is effectively a “marriage tax”, according to Nicole DeRosa, senior tax manager at Wiss. Note that increased rates (5% plus the 3.8% surtax) start at $400,000 of income for individual filers, but $450,000 for joint filers. Many times the joint filing limit would be double the individual limit, but in this case it is barely above. This effectively means married couples are being taxed for their matrimony.
FINSUM: This is illogical and unfair to married couples. Hopefully this does not make it into law in its current form.
Biden’s big ‘death tax’ has been spooking advisors and their wealthy clients for months now, and there are very major concerns over if and when it will be implemented. Well we have good news and bad news today. The good news is that both the House Democrats and the Ways and Means commission have put forth proposals with significantly lower tax rates than Biden’s initial budget. The House Democrats, for instance, would keep all-in capital gains taxes at a max of around 28.8% (counting the surtax). The bad news is that a recent adoption by the Ways and Means Commission puts the cutoff date for any company sales that would be affected by Biden’s much bigger capital gains taxes as Sept 13th (for sales with a binding contract prior to that date).
FINSUM: Overall, the direction of the proposals is getting more favorable for the HNW community, but there is still a LONG way to go.
Any advisor paying attention to President Biden’s new proposals has surely been aware…see the full story on our partner Magnifi’s site
A lot of attention in the wealth management industry has been paid to President Biden’s efforts to raise taxes…see the full story on our partner Magnifi’s site
The last couple of months has been very tense for advisors. Not only have discussions around a renewed version of the DOL rule been swirling, but highly significant tax hikes are pending. Biden is planning a huge multi-trillion Dollar increase in spending, which means tax hikes are almost a certainly. And none of them is more worrying than the hike on long-term capital gains taxes, which Biden wants to push up to 43.4% vs 23.8% now. That is scary in itself, but here is the truly worrying part: experts think it will take effect May 27th (next Thursday). This would be simultaneous to his announcement of his full budget.
FINSUM: Evidently Biden doesn’t want to give advisors and accountants time to game plan around his changes, so he wants them to go into effect immediately upon release of the budget (and they could even be retroactive).