May 5, 2021
President Joe Biden’s new proposal for tax reforms has been getting lots of media attention in the past week. It contains provisions to substantially raise the tax rates on long-term capital gains and eliminate the step up in basis. This substantially limits some of the tax planning opportunities investors and business owners have enjoyed for a long time. In today’s episode, Grant reviews the new changes President Biden has proposed, what they mean for investors, and some of the planning opportunities that come with the new updates.
[01:26] New Tax Plan – Grant reviews some of the key goals of President Biden’s new tax plan and what they mean for the general public and investors.
[05:32] Long-term Capital Gains – How long-term capital gains work, how they’re different from their short-term counterparts, and how taxation comes into play.
[08:53] Proposed Rates – Grant reviews the new tax rates proposed in President Biden’s tax plan and new planning opportunities that come with the new changes.
[13:48] Selling a Business – Selling a business is one of the instances where a business owner can end up paying substantial amounts in tax according to the proposed tax rates. Grant shares his take on How business owners can work around this.
[18:30] Step Up in Basis – Step up in basis is a tool widely used by financial planners to minimize the tax impact, and President Biden’s new proposal substantially limits this opportunity. Grant shares his thoughts on how we can adapt to these proposed changes.
[25:47] Estate Planning – How the elimination of step up in basis affects estate planning and how to minimize the tax impact for people who inherit assets.
Resources:
Reviewing the Biden Tax Plan
www.abovethecanopy.us/reviewing-the-biden-tax-plan/