Biden Tax Agenda

Pres. Biden’s tax agenda would help fund $1,5 trillion.  

Individual Income Tax Change: 

·       Proposed new 39.6% top tax bracket for earning more than $452,700 in 2022 and married couples making at least $509,300;

Capital Gains, Stepped-Up Basis, Carried Interest: 

·       Proposed almost-doubled tax rate on these gains for people making more than $1 million. The present capital gains rate of 20% would rise to 39.6%. 

·      In addition, for gains above $1 million Biden’s plan would end stepped-up basis, the device that allows appreciated assets to be inherited without taxes on the gains. 

·      The new top capital-gains rate would be 43.4% when including a surtax to help pay for the Affordable Care Act (Obamacare) 

Like-Kind Exchanges: 

·      For property investors who escape capital gains tax when they roll profits from real estate sales into future real estate purchases—Biden’s plan would eliminate that tax break for gains over $500,000. 

·      Individual investors are bigger beneficiaries of the existing Section 1031 exchange provision

IRS Enforcement: 

·       $80 billion and more authority to the IRS is what is expected to be proposed by Pres. Biden

·       The plan aims for more audits of high earners

·       offshore bank accounts and

·        inflows and outflows. 

Source: Bloomberg Tax