President Biden has unveiled a new plan that involves increasing taxes on inherited properties in order to help fund the American Families Plan. This CNBC article delves into the possible outcomes of this new plan, explaining that financial experts suggest the new plan may impact more families than just the more affluent ones. We’ve broken down the key points that you should know when it comes time to review your estate plan.
Currently, heirs are able to defer taxes on any inherited home gains until they sell the property. With Biden’s new plan, however, home inheritances would be treated like a sale where heirs would pay for gains that occurred before they received the property.
There are ways to minimize the possible impact of this new plan, starting with a home appraisal and meeting with an estate-planning attorney. Another option would be to gift a property to your heirs while living with a qualified personal residence trust.
One more option would be to save on taxes by increasing the home’s basis by improving the property in order to reduce the profit. You can do this by adding a new roof or any other renovations to increase value.
If you are ready to discuss your options, give us a call today.