There are a lot of questions about President Biden’s Build Back Better plan and potential tax law changes, including an adjustment to capital gains taxes.
One of the proposals Congress is considering sets the top rate for taxing capital gains at 25%, up from 20% under current law. Another would raise the capital gains tax rate to 39.6% for taxpayers earning $1 million or more. Still another would make the change to capital gains tax retroactive, with a start date of April 2021.1,2
At this point, many ideas are being considered as legislators look for ways to raise revenue to help pay for the Build Back Better plan. Corporate tax rates, individual tax rates, estate tax rules also are on the negotiating table.
As difficult as it may be, the best approach is to wait and see. It would be hasty to make any portfolio changes based on current discussions. An ambitious investor would have to guess what policies will be in the final bill, estimate the financial impact, and determine any needed portfolio changes. That’s a tall order.
This article is for informational purposes only and is not a replacement for real-life advice, so make sure to consult your tax, legal, and financial professionals before modifying your capital gains tax strategy.
- https://www.bloomberg.com/news/articles/2021-09-13/house-democrats-pitch-capital-gains-tax-of-25-for-high-earners
- https://www.bloomberg.com/news/articles/2021-06-16/yellen-argues-capital-gains-hike-from-april-2021-not-retroactive
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Alex Collins is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). OSJ: 333 N Indian Hill Blvd., Claremont, CA 91711 Ph: 909-399-1100. Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly-owned subsidiary of Guardian. Quantified Financial Partners is not an affiliate or subsidiary of PAS or Guardian. This material contains the current opinions of the author but not necessarily those of Guardian or its subsidiaries and such opinions are subject to change without notice. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. Material is for educational purposes only. By providing this content we are not undertaking to provide any recommendations or investment advice regarding any specific account type, service, investment strategy or product to any specific individual or situation. Please contact a financial professional for guidance and information that is specific to your individual situation. All investments contain risk and may lose value. AR license #7264699 CA License #OH24806 #2021-130242 Exp 11/2023
