New Tax Law Changes Coming ? – Part 1
We have received many calls about upcoming changes to the federal income, estate and gift tax laws. To be clear, nothing has changed yet. Draft legislation has been proposed by the House of Representative’s Ways and Means Committee but right now it is nothing but a proposal. Things can and often do change dramatically from where they start but we are just at the beginning of the legislative process. Final drafts must be voted on by both houses of Congress and any differences between the two bills must be reconciled.
Understanding that, however, let’s take a look at what is currently being proposed since it is generating a lot of public discussion in the media and by our clients. Everyone wants to know how they will be affected.
One noteworthy omission in the current draft is the step up in basis. Since President Biden took office there has been much talk about his effort to eliminate the step up in basis. I wrote about that here last October. No change, however, has been included in the current proposal. Of course, it still could end up in the final version but so far nothing.
What is in the current draft affects estate, gift and generation skipping tax, retirement accounts and grantor trusts. Next week I’ll detail those as well as tell you why for most people there isn’t anything to worry about.