Forbes has published an article, “Tactics To Reduce Your Capital Gains Tax And Your Estate Tax”, which discusses possible tactics to reduce or defer appreciated property taxes as a result of the Biden Administration’s changes to the taxation of long term capital gains. The article begins as follows:
The Biden Administration and Congress have proposed sweeping changes to the way long term capital gains are taxed both during your lifetime and after your death. Although none of these proposals are final, and may never become final, they do raise the question of what tactics are available to reduce or defer the taxes on appreciated property. One likely strategy that has been suggested to blunt the cumulative effect of both the capital gains tax and the estate tax changes, which will consume more than 75% of any estate with over $3.5 million and consists of mainly highly appreciated property, is to harvest the capital gains each year. That is, have a transaction that realizes capital gains each year, in an amount that keeps the taxpayer’s income below the $1 million level where the highest tax is triggered. When the gains are realized, the assets transacted get a new cost basis. The challenge then is how to reduce or defer the tax due on these transactions. Fortunately, there are existing, proven tactics for doing so.
Click here to see the full article: “Tactics To Reduce Your Capital Gains Tax And Your Estate Tax”
Posted by Marin Larkin, Associate Editor, Wealth Strategies Journal.