Proposed Changes to Treatment Capital Gains After Death Seem Unlikely…BUT

President Biden, as part of The American Families Plan, proposed an overhaul of the treatment of capital assets after death.  Under current law, all capital assets owned by a person when they die receive a “stepped-up” basis. This means that your beneficiaries would typically receive the capital assets from your estate with a higher tax-basis so, if they then turned around and sold those assets, there would be little or no capital gains tax due.

President Biden’s proposal would eliminate the automatic step-up in basis for estates with total unrealized capital gains in excess of $1 million.  Instead, the unrealized capital gains would be subject to capital gains tax at a potential rate as high as 39.6% rate (also part of the proposal).

It is particularly noteworthy that the estates subject to this new capital gains tax at death may also be subject to the federal estate tax at its 40% tax rate.  Further, the estates may also be subject to State estate tax if the estate is located in Maryland or DC.

At this point, it seems unlikely that Congress will pass The American Families Plan with these proposed changes to the capital gains tax law but the capital gain tax is increasingly becoming a target so these types of proposals should continue to be monitored.

As 2021 winds down, now is a good time to consult a tax attorney who can assist with your estate planning needs!

Posted in Law

Shaping Public Opinion: The Power of Patch-Through Phone Calls

Compass Public Relations often works in tandem with lobbyists to affect policy. One tool that can be effectively employed is patch-through phone calls. Compass PR works with clients to frame a message for or against legislation and then facilitates targeting key legislators who may play a decision-making role on such issue. Then dozens – or even hundreds – of live constituent phone calls are generated into legislators’ offices on a particular issue. This is an important tool to advance or defeat legislation! If you would like to augment your lobbying strategy with phones, please let us know.

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