Tuesday, October 13, 2020
The Tax Cuts and Jobs Act raised the exemption amount to $11.58 million for individuals and $23.16 million for married couples. However, Biden's proposal would undo this change and would lower the exemption amount before its planned demise on December 31, 2020. "Biden would also do away with step-up in basis, which means unrealized capital gains would be taxed at death."
Understandably, wealthy Americans are concerned with this threat as they would not be able to move assets as easily without triggering the tax. These concerns are pushing wealthy Americans to take advantage of the current tax rates and exemption amounts related to gifts and other transfers.
Geoffrey Weinstein, special counsel in the Tax, Trusts & Estates Department of Cole Schotz stated, "If Biden were to win the election, a change in tax policy could be retroactive to the beginning of 2021, which is why some individuals are seeking to have these changes in place by year’s end."
It may be time for you to take a look at your estate plan or if you are a professional, to alert your clients about the chances of the imminent doom that tax law faces.
See Brittany De Lea, Biden tax hike plan causes wealthy Americans to panic over estate planning strategies, Fox News, October 12, 2020.