Income, Estate And Gift Tax Hikes Ride On Election Results
Published Wednesday, Sept. 30, 2020; 9:30 PM EST
(Wednesday, Sept. 30, 2020; 9:30 PM EST) Should the Democrats win the White House and Senate on November 3, high-income individuals, along with those having estates valued at more than $1.1 million, will have to assess and implement tax reduction strategies before the end of the year. Complicating matters, the election results may be contested and delayed, making it even more important to be prepared to act swiftly.
President Donald Trump has not spelled out a comprehensive plan to cut the nation's soaring deficit and long-term debt, while Vice-President Joe Biden released a plan that would double the long-term capital gains tax rate from 20% to 39.7% and slash the lifetime tax exemption on gifts and estates from $11.6 million currently to $5.8 million. The Biden plan would also subject earnings of more than $400,000 to the 12.4% payroll tax.
The tax reduction techniques to be considered by high-earning business owners and professionals or individuals with estates worth more than $1.1 million are listed below. Please consider this call to action and contact us with questions.
charitable remainder trusts to defer and eliminate capital gains
installment sales to children to reduce capital gains
electing out of an installment sale to accelerate gains into 2020
the math of recognizing capital gains and losses in 2020
grantor charitable lead trusts to cut capital gains
charitable gifts to reduce capital gains
Opportunity Zone investments and reducing capital gains
using Internal Revenue Code (IRC) Section 1031 exchanges to lower capital gains
tax collars to manage capital gains
IRC Section 1259 “choking” collar to trigger capital gains in 2020 or defer gains
shorting against the box to recognize gains in 2020 or 2021
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