https://www.wsj.com/articles/bidens-capital-gains-tax-plan-would-upend-estate-planning-by-the-wealthy-11619716044?mod=mhpIf I’m understanding this correctly this is going to be a major hit for many frum families. Take your typical middle to upper middle class elderly frum person who bought a home in Brooklyn, etc. decades ago and has a modest saving account. The proposal will treat it as if all of his assets were sold upon his death and tax all unrealized gains over $1 million. Same goes for the small family business which will need to be sold to pay the tax bill rather than have the kids continue to run it.
The premise is that it’s unfair for the super wealthy to pass down multi million dollar appreciated assets to the next generation so they are going to tax all estates upon death as if they were sold with a $1 million per person exemption. That makes some sense with your average American family of 1.5 kids. But the proposal doesn’t distinguish between the number of inheritants. With your typical frum family having upwards of six, eight, or 10 children what is already a fairly modest inheritance is going to be slammed with a tax of upwards of 40% ( long term capital gains are no longer going to have favorable tax rates) on that estate before it gets divided among the kids. Time to start thinking of effective tax strategies now.
