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The Senate passed a $1 trillion dollar infrastructure bill on August 10th and now the proposed $3.5 trillion-dollar reconciliation bill will be taken up in the Senate before making its way to Congress, where it is expected to pass narrowly without Republican approval.
The reconciliation bill will need to include a host of substantial tax increases to pay for the newly proposed spending. Changes will likely include an increase in the long-term capital gain tax to 39.6%, a stepped-up gain at death, and major changes to the estate, gift, and GST provisions of the tax law. What's more, these changes could be made retroactive.
This new tax landscape will significantly impact higher-income households. It's imperative for lawyers, CPAs, and financial advisors to understand and stay on top of these significant developments on behalf of their clients.
Similarly, owners of closely-held businesses, homes, stocks, collectibles, and even cryptocurrency should meet with their estate planning attorneys and financial advisors to assess how they'll be impacted if capital gains are taxed as ordinary income and/or the estate tax exemption is lowered. (To ensure comprehensive planning, it’s ideal for all of your advisors to be working in concert with one another. This is why we welcome the opportunity to work with your other trusted advisors.)
My advice to advisors and clients is to begin the process now; don't wait until the end of the year. It will take time to assess the big picture and plan accordingly. Doing so in a less stressful and less hurried way will result in more desirable outcomes. Contact an Altman & Associates estate attorney today at 301-468-3220 or fill out our contact form.