President Joe Biden has proposed certain changes related to inherited homes as part of his broader tax policy agenda. However, it’s important to note that specific plans and policies can evolve or change over time, and there may have been updates since then.
He has released details on a plan for higher taxes on inherited homes to help fund a $1.8 trillion American Families Plan. The proposal would target generational wealth transfers taking place.
One part of this plan involves the Step-up in Basis: President Biden has proposed changes to the “step-up in basis” rule, which currently allows heirs to inherit assets, including homes, at their current market value, thereby eliminating capital gains taxes on the appreciation that occurred before the inheritance. The proposed plan seeks to eliminate this tax advantage by taxing capital gains at the time of transfer, subject to certain exemptions.
A second part of this proposal includes the following: a Capital Gains Tax: Under President Biden’s plan, inherited homes and other appreciated assets would be subject to capital gains tax when transferred to heirs if the total unrealized gain exceeds a certain threshold. Biden has indicated intentions to include provisions to protect family farms and small businesses from being unduly burdened by these changes. Any changes to tax policies, including those related to inherited homes, require approval from Congress. The exact details and outcomes of President Biden’s proposals may be subject to negotiation and potential modifications during the legislative process.
Click on the link below to read more: President Joe Biden’s plan for inherited real estate.