Navigating 2024 Tax Changes: Potential Shifts in Income Tax Regulations
As 2024 approaches, potential income 2024 tax changes loom, with the Biden administration considering significant alterations. Among the proposals is the repeal of the basis step-up upon death and treating capital gains akin to regular income. This article explores the implications of these potential changes on transfer tax planning and income tax preparation.
Basis Step-Up and Transfer Tax Planning
The Biden administration’s contemplation of repealing the basis step-up upon death raises concerns in transfer tax planning. Despite its primary focus on income tax preparation, the basis step-up plays a crucial role in influencing decisions around low-basis assets. Currently, holding onto such assets until death allows for a basis step-up, minimizing capital gains taxes upon sale or gifting.
The Proposed Alternatives
While the complete elimination of the basis adjustment seems improbable to many observers, an alternative proposal suggests treating the transfer of valuable property upon death or by gift as a taxable event. This section explores the potential impact of such changes on taxpayers and their strategies for wealth transfer.
Biden Administration’s Plan for Qualified Dividends and Capital Gains
Further complicating the landscape, the Biden administration proposes taxing qualified dividends and long-term capital gains as ordinary income for individuals earning above $1 million. This section delves into the potential ripple effects of this proposed change and its cumulative impact when combined with the potential elimination of the basis step-up.
Conclusion:
As uncertainties surround potential 2024 tax changes, consulting with an estate planning attorney becomes crucial. Understanding the implications of the Biden administration’s proposals on basis step-up, capital gains, and income taxation is essential for making informed decisions.
Ask an Estate Planning Attorney Today
For personalized guidance on navigating these changes, visit Hudack Law Estate Planning Attorney and explore our various areas of service. Proudly serving California and Arizona, our dedicated team is ready to assist you. Feel free to contact our California line at (877) 314-4309 or our Arizona line at (602) 777-7882.