From the perspective of a financial professional, the window of opportunity to act before taxes are hiked is about to close. The plan to end the step-up in basis on inheritances is perhaps the most significant change.
Other tax proposals President Biden campaigned on include a sharp reduction in the favorable treatment on profits from investments, a new top tax rate of 39.6%, and an expansion of the 12.4% Social Security tax on tax-filers who earn more than $400,000 in adjusted gross income annually.
At the time this was written, the details of the new taxes were still unknown. The elimination of the step-up in basis was still an open question but politics were dictating the timeline and dimensions of the tax changes.
Itâ€™s possible the tax hikes about to be negotiated in Congress could be retroactive, which would render defensive planning measures fruitless. Thatâ€™s unlikely, but the window of opportunity to act is closing.
If your annual income is higher than $400,000 or your family has an estate worth more than $3.5 million, please let us know if you have questions.
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