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The Biden Tax Plan: What We Know
We have been learning more about President-Elect Joe Biden's tax plan and how it may affect you.
 
Estate Tax
 
Biden is proposing to reduce the amount that exempts people from the estate tax. His proposal changes the exemption to $3.5 million with a maximum estate tax rate of 45 percent, according to the Tax Foundation. Currently, the estate tax exemption is $11.58 million with an estate tax rate of 40 percent.
 
Capital Gains Tax – Elimination of the Step-up in Basis
 
Elimination of the Step-up in Basis: According to the Tax Foundation, Biden has a major wealth tax proposal on capital gains. That is to eliminate the special treatment called "Step-up in basis" upon death. Today, at the death of a person, his/her assets are transferred to the heirs at the market value of those assets on the date of inheritance, instead of at the original cost of the person who has passed away. So today, if and when the heirs sell the property, the heirs' capital gains tax will be assessed based on the current market value minus the market value that existed when inherited, instead of when originally purchased, resulting in less "gain" and less taxes paid.

However, with Biden's proposal, the value of the property will no longer be "stepped up" to the market value at the time of the inheritance. So if you are the heir, you will pay taxes on the current market value minus the original cost. A bigger difference, meaning you will pay more in taxes. Many estate plans may need to be revisited if this tax proposal passes.
 
Capital Gains Tax – Treated as Ordinary Income

For an individual earning more than $1 million, capital gains will be treated as ordinary income instead of the 15 to 20 percent current tax rates. In addition, the ordinary income maximum tax bracket is proposed to be increased from 37 percent to 39.6 percent.

Purpose

Overall, Biden says his tax reform would raise much needed federal revenue by increasing taxes on the wealthiest Americans, while reducing taxes for the middle class.
 
Which category do you fall under?
 
If you would like to find out more about how your estate would be affected by President-Elect Biden's proposed tax plans, please contact us. We are here to help you.
 
Sincerely,
Yahne
Our Next Two Online Seminars

Saturday January 9, 2021
Estate Planning in Plain English:
Why it's Critical to Your Loved Ones

10:00 am - 11:00 am

Learn how to avoid family clashes, court battles and undue taxes! Control how your assets will be preserved and distributed. Protect your wealth and your retirement.
Protecting You from Nursing Home Costs

11:30 am - 12:00 pm

Long-term care can quickly drain your lifetime of savings. Learn steps to take to get the care you need while avoiding impoverishment!

You may register for one or both online seminars by clicking on the above links or by contacting Keya at (703) 448-6121 or keya@miorinilaw.com.
How to Enter an Online Seminar
Please click on the photo or contact Keya at keya@miorinilaw.com to schedule an online seminar run-though.
Personal and Professional Notes
Yahne and her family are sad to report that Yahne's father has passed away at age 89. She was able to attend the funeral in France and spend time with her French family.
Kyla Cumberland, your point of contact for our Elder Law Department, has announced her engagement! We congratulate Kyla, who was raised in Northern Maryland.
Our Client Relations Coordinator, Keya Meshesha, never really needed a car until she took a job in the metro area with us! She had been taking advantage of public transportation. She recently passed her DMV exam and will soon take her driving test.

It seems like just yesterday that our senior paralegal, Lauren Harris, formerly Lauren Spradlin, needed some time off to get married and start a family. Now baby Aria is four months old!