The Estate Tax May Change Under Biden Affecting Far More People

NYTimes

 

An interesting article in today’s NY Times authored by Paul Sullivan.  He writes, “So the question for taxpayers now is:  What happens once Mr. Biden can begin enacting changes in tax policy?  The biggest long-term change involves the estate tax.”  Sullivan goes on to discuss the possible loss of step-up in basis, “A Biden administration may move to change this for logical and revenue reasons.  Imagine trying to determine the capital gains from AT&T stock that your grandmother bought in 1943 when record-keeping was done with a pencil and paper.  Today, cost-basis information can be retrieved in seconds.”  He goes on to discuss some of the inherent problems in this approach.

A different approach could be adjustment to current estate tax exemptions and rates.  “With Democrats controlling the legislative and executive branches, there is concern that the exemption level could drop to $5 million or even $3.5 million…For the wealthiest in the country, the bigger concern is the rate itself.  It’s now at 40%, but it was as high as 55% in 2001.”

To read the full article, click here.

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