Trump’s 2017 Tax Plan
On Wednesday, April 26, 2017 President Trump presented a proposal to overhaul the Tax Code. The proposal was very brief – just one page. Of the seven items, I wish to discuss only two because they most influence Estate Planning, and those are the proposed changes to Capital Gains, and the Federal Estate Tax.
Proposed Changes to Capital Gains:
Proposed to be reduced from 23.8% to 20%
Proposed Changes to the Federal Estate Tax:
Complete elimination of the Federal Estate Tax. It is indexed for inflation, and as of 2017 it is:
Individual – $5.49 million, and for married couples it is $10.98 million (double what it is for a single person)
What are Capital Gains?
When you buy something and it goes up in value by the time you sell it, you’ve realized a Capital Gain, and you are supposed to pay taxes on that gain. Many people think this only applies to rich investor types, but in-fact, it applies to a single silver coin, your Samsung TV, or whatever!
The 3.8% reduction represents the 3.8% surtax that was added by President Obama during his administration to help fund Obama Care (or the Affordable Care Act).
What is the Federal Estate Tax (or sometimes “Federal Estate Tax Exclusion”, or “Federal Inheritance Tax”, or “Federal Death Tax”)?
This is the amount that can be passed to your beneficiaries free of any tax imposed at the federal level. Luckily for most of us, this tax never kicks in and gets applies to our estate. As a matter of fact, it only applies to less than 1% of the population. I said “luckily”… perhaps we’d all like some of that luck!
Estate planning is more than just saving on taxes (at any level). If you need help, please feel free to give me a call. I always answer my own phone.
Well, for now there is no conclusion. We will keep our eye on things and see what happens. These were just proposals after all. Stay tuned!
My most important job is to listen to your wishes then suggest solutions. Call today and let’s start planning!
See lots of estate planning information on my website at: www.myestate-plan.com
Thanks for reading!
Just like my website, nothing in this blog is intended as legal advice. If you need legal advice, contact an attorney licensed to practice in your jurisdiction. I am licensed to practice law in California. Further, please remember that I speak in generalities in my blog (and on my website). There are so many different factors that can contribute and completely change the outcome that it would not be practical to discuss all of them here. This is why I speak in generalities. Thanks again for reading.
This document is for informational purposes only. Nothing in this is to be considered legal advice. Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship. If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction. I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information.