Build Back Better Act. The House Democrats have proposed the Build Back Better Act that would contain the following tax provisions (subject to further change)
Uncertainty. In order for any tax increases to tax effect, all 50 Senate Democrats must vote for the proposal. At last update, there are one to two Senators holding out so status is uncertain. If it does pass, it is unknown which provisions will be revised or supplemented by the Senate.
Estate Planning. High net worth families should meet with their estate planning attorneys as should any families that have a grantor trust or are the beneficiary of a grantor trust. Life insurance trusts must be reviewed to determine whether action should be taken in 2021.
Income Tax Planning. Client should consider meeting with or discussing income tax planning with their accountants. There may be situations in which the acceleration of income in 2021 makes sense due to lower rates and potentially lower estate tax exemption. Examples include gain recognition in 2021 as well as Roth IRA conversions.
Please note that, because you have not asked for a formal tax opinion on this issue, this advice is limited to the facts provided to us or of which we are aware and, again at your request, is being provided based on our general understanding of the relevant law, without significant additional research. Accordingly, this advice is not intended for the purpose of avoiding tax-related penalties under the Internal Revenue Code and cannot be shared with others to promote, market or recommend to another party any tax-related matter addressed