Market Update April 21, 2021

NEW CAPITAL GAINS TAX PROPOSAL: ARE YOU EXEMPT?

To pay for his $3 trillion dollar infrastructure plan, President Biden wants to change the way capital gains taxes are administered after death. Currently, when someone inherits property or investments, they aren’t taxed on the appreciation that took place before they gained control of the asset. This is being eyed for a change, making the inheritor liable for taxes on all of the gains, including the ones that accrued before they took ownership.

While being marketed as “taxing the rich,” should this rule change, it will impact many middle-class families, especially as property values continue to rise. ​I’ve included an example in the right column. Various exemptions have been proposed, such as: family owned business, farms/agriculture, or gains under $1 million. However, it is unclear what will end up in the final proposal… so all we can do right now is just to wait and see.