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Im not so hardheaded that I wont own up to my mistake lol. I have 9 years before I can dip into my 403b so I haven't really looked into the tax structure on it. Thought it was the same as an investment portfolio. At any rate I still stand on the belief that government should not be taxing anyone at near 50% of earnings.
Regarding your last point….totally understand how you feel.
Why not just have the government confiscate all the property right up front? That is what will happen anyway.
Think about it: a parent dies and leaves a home to the daughter. The daughter is not particularly rich. Now she has a home that is going to be taxed and she suddenly owes $250K to the IRS. What exactly do the morons expect of her when she has nowhere near that much money? So what happens? She loses the house to the IRS, what few assets she has are seized, and her life is basically ruined and turned upside down. Yeah... THAT'S a great idea Calamity Joe! Great thinking. All so you can get more revenue to support illegal aliens who shouldn't even be here and a bunch of "freebies" for indigents.
Why not just have the government confiscate all the property right up front? That is what will happen anyway.
Think about it: a parent dies and leaves a home to the daughter. The daughter is not particularly rich. Now she has a home that is going to be taxed and she suddenly owes $250K to the IRS. What exactly do the morons expect of her when she has nowhere near that much money? So what happens? She loses the house to the IRS, what few assets she has are seized, and her life is basically ruined and turned upside down. Yeah... THAT'S a great idea Calamity Joe! Great thinking. All so you can get more revenue to support illegal aliens who shouldn't even be here and a bunch of "freebies" for indigents.
It doesn’t happen. The Federal Estate Tax exemption is currently about $14 million. I believe without further legislation that amount will revert to $7 million in 2026 (I think). So, unless someone is left an estate of more than $14 million now, they owe $0 in Federal Estate taxes. The idea that moderate income people (or people of modest net worth) are potential victims of the Federal Estate tax is not a legitimate concern.
Now she has a home that is going to be taxed and she suddenly owes $250K to the IRS.
Depends if the house was part of a trust set up by the parent(s). Depends on the state. Depends on the market value of the house. The first $250K of the house is excluded from capital gains taxes if the beneficiary lives in the home 2 years out of 5 before selling. Or, the beneficiary can possibly take advantage of a “step-up basis,” which allows the fair market value of the property at the date of the trustor’s death to be used during the calculation of capital gains when the property is sold. If the property is sold immediately, then the difference in FMV and stepped up basis may be very little or even zero.
There are several strategies that can help a beneficiary avoid or greatly minimize capital gains on receiving property. One would hope such a beneficiary would seek the assistance of a CPA well-versed in estate planning to determine best options.
Depends if the house was part of a trust set up by the parent(s). Depends on the state. Depends on the market value of the house. The first $250K of the house is excluded from capital gains taxes if the beneficiary lives in the home 2 years out of 5 before selling. Or, the beneficiary can possibly take advantage of a “step-up basis,” which allows the fair market value of the property at the date of the trustor’s death to be used during the calculation of capital gains when the property is sold. If the property is sold immediately, then the difference in FMV and stepped up basis may be very little or even zero.
There are several strategies that can help a beneficiary avoid or greatly minimize capital gains on receiving property. One would hope such a beneficiary would seek the assistance of a CPA well-versed in estate planning to determine best options.
Trust is the way to go one of the big problems people don't realize is if you have a parent lives on their own they suddenly become incapacitated you have a difficult time trying to get banks allow you to manage their money with a regular general power of attorney. Banks have been scammed before where someone shows up with a fraudulent power of attorney drains someone bank account. If the bank account is in the trust name the bank has a copy of the trust with your name on it as a trustee lot easier to deal with. I'm no expert just what attorney's have told me who do estate planning.
There's a lot more in his proposed budget for getting revenue.
I posted a link earlier in the thread.
This cap gains change is just the tip of the iceberg for the revenue the FedGov wants.
They are pretty much going after anyone that makes money in the US.
I read the proposal. I did skip the parts that were solely about corporations.
3 of the highlights I noted (not a comprehensive list):
- In terms of individuals, "high-earners" are affected. Generally speaking, singles with a yearly (MAGI) income over $400K (>$450K for a couple filing jointly) are affected by proposed increases in taxes. Top individual tax bracket will be increased to 39.6%.
- Tax long-term capital gains and qualified dividends at ordinary income tax rates for taxable income above $1 million and tax unrealized capital gains at death above a $5 million exemption ($10 million for joint filers).
- Limit retirement account contributions for high-income taxpayers with large individual retirement account (IRA) balances.
I guess as I have gotten older and “found” my financial place in life, it’s apparent that I am never going to be a so-called high earner. Thus, none of this stuff directly impacts me. I’m retired, and believe I am financially situated to make it to the end of my time here on planet earth comfortably (not luxuriously)…so again, I feel insulated from even any indirect consequences of these policies. So I really don’t get to worked up one way or the other about this.
Top capital gains and dividends tax rate of 44.6%. Also he is proposing a "death tax". Biden’s proposed capital gains tax hike will also hit many families when parents pass away. Biden has proposed adding a second Death Tax (separate from and in addition to the existing Death Tax) by taking away stepped-up basis when parents die. This would result in a mandatory capital gains tax at death — a forced realization event.
I believe the MAXIMUM capital gains tax should never exceed a persons regular tax rate for short term capital gains and a reduced rate for long term capital gains.
"I believe the MAXIMUM capital gains tax"
There should never be one in the 1st place.
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