By Brian E. Ravencraft, CPA, CGMA, Partner at Holbrook & Manter, CPAs
I usually stay clear of highly charged political topics, but I believe this one is worth mentioning. What I am about to explain has not been introduced to Congress (and timetable is uncertain), but the topic is part of President Biden’s tax plan.
Up to this point and with changes made back in 2017 tax legislation, very few people end up paying estate taxes, or even having to worry about it at all. With President Biden’s tax plan, however, a potential and massive change in how estate taxes are calculated could be on the horizon.
Biden’s plan could leave you paying higher income taxes after death by repealing present law’s step-up in basis that increases the tax basis for inherited assets to their full fair market value upon death. This proposed rule — which “carries over” an asset’s tax basis to the heir — likely would entail a significantly greater overall tax burden with respect to transferred assets than would the decreased exemption.… Continue readingRead More »