Tag Archives: Biden Green Book

Part II: Biden Proposal Changes the Taxation Game for Gifts and Inheritances – Americans Abroad Hit Hard

Today’s post, Part II, was written by Virgina La Torre Jeker, J.D. and John Richardson, J.D.

Part I of this blog post discussed President Biden’s Green Book proposal that would change the tax rules for unrealized capital gains when assets are gifted or passed at death. To recap, the major thrust of the Green Book proposal (starting at page 30) is to treat gifts and bequests as “deemed sales at fair market value” triggering a capital gains tax which would be payable with respect to the year of the transfer. The net investment income tax / 3.8% surcharge looks as if it can certainly apply in addition to the capital gains tax (full detail on the 3.8% surcharge is here). The Green Book contains no proposals to eliminate or change the current Estate and Gift Tax rules and we believe that taxing gifts and bequests from an income tax perspective while keeping the Estate and Gift Tax regime in place is only a recipe for tax disaster.

Today’s post, Part II, looks at how the proposal will particularly impact the American abroad, its exemptions and carve-outs and how it complicates tax planning for individuals wishing to give up their US citizenship or green card.

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“With Liberty and Justice (and Death Taxes) for All” …. Biden Proposal Changes the Taxation Game for Gifts and Inheritances (Part I)

Today’s post is in two parts and was written by Virginia La Torre Jeker, J.D. John Richardson, J.D.

On March 28, President Joe Biden released the FY2023 Budget, also known as the Green Book, available here. The Green Book is not proposed legislation, but it might be viewed as a kind of reading of the tea leaves showing what may lie ahead in the not-too-distant future. Today’s post will discuss a Green Book proposal that would change the tax rules for unrealized capital gains when assets are gifted or passed at death.

This is the second time this proposal has been put forth by the Biden Administration. It may be sitting on the shelf for now, but the proposal is an enticing revenue-raiser and helps meet what society has been viewing as a call for a “fairer” tax code, by targeting higher-income and asset wealthy taxpayers. We bet it goes through in one form or another.
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