The Democrats who are part of the House Ways and Means Committee have issued an updated draft on the tax legislation. This proposal is one that will have substantial effects to your personal taxes. For the legislation to pass, a minimum of House and Senate Democrats will need to agree, as well as the White House. We will continue to keep an eye on the legislative process closely and providing updates throughout the fall legislative cycle.
With the proposed legislation totaling over 800 pages it is a challenge for anyone to offer you a comprehensive analysis. The good news is that a handful of the proposed changes would impact transactions or transfers that are made before the new bill is passed. Many of the provisions would not take effect until January 1, 2022. Highlighted below you will find some of the most meaningful proposed changes:
Not to be the bearer of bad news, but If you had planned for a transaction to be completed prior to the capital gains tax increases, you are out of luck. One saving grace is that if you were to be locked into a legally binding contract today, you still have a [slim] chance of being taxed at the 20% rate. In addition, this is a far cry from the 39% (or more) capital gains tax rate that had been batted around.
If you are one of those who are still ‘on the fence’ or considering your options, I implore you to reach out to our team at your first convenience. While nobody knows where things will land in Washington, I think it’s safe to say that capital gains and ordinary income tax levels are sure to be on the rise!
*Please note that as information is updated and modified, terms and conditions are subject to change.