There are many unanswered questions surrounding President Biden's Build Back Better agenda and potential tax law adjustments, such as a capital gains tax adjustment.
One of the measures under consideration by Congress raises the top capital gains tax rate from 20% to 25%, up from 20% under current law. Another bill would increase the capital gains tax rate for those earning $1 million or more to 39.6%. Another would make the capital gains tax reform retroactive, with an April 2021 start date. 1,2
Many options are being discussed at this time by legislators as they look for methods to raise revenue to help fund the Build Back Better plan. Corporate tax rates, individual tax rates, and estate tax regulations are all up for discussion.
The best approach, as tough as it may be, is to wait and see. Any portfolio modifications based on present conversations would be hasty. An astute investor would have to guess which policies will be included in the final law, calculate the financial impact, and make any necessary portfolio adjustments. That's a difficult task.
Please do not hesitate to contact us if you have any questions about capital gains taxes. Waiting for Congress to act can be difficult, and with so many bills waiting, you may feel helpless. We work with professionals who are monitoring events in Washington and may be able to provide you with insights to your most pressing questions.
1. Bloomberg.com, September 13, 2021
This article is for informational purposes only and is not a replacement for real-life advice, so make sure to consult your tax, legal, and financial professionals before modifying your capital gains tax strategy.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.