August 19, 2022
President Biden’s New Tax Proposal | Taxing Unrealized Gains
In this episode of Berry’s Bites, Chris Berry discusses President Biden’s New Tax Proposal about Taxing Unrealized Gains
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President Biden’s latest tax plan. Welcome to Berry’s bites, please join our host attorney and financial advisor Chris Berry. The one concern I have with these things is always like a slippery slope and here’s the concern with the latest tax proposal he wants to tax unrealized gains which are kind of problematic.
Now granted if it’s you’re just taxing only people who have 100 million dollars of assets fine great yeah but my concern is okay if we do it for this level then what’s not to say that it’s going to be done for people who have less wealth than that and so this concept of like taxing unrealized gains like the idea is that okay let’s say you buy and again this is only his proposal is only applying to what we call the ultra balcony, but this concept is a little bit concerning if it gets more traction because now and we’ve talked about step up and basis and how President Biden was going over that or going after that previously but the concern here is let’s say you buy real estate for a hundred thousand dollars and then it grows to a million dollars in value.
Typically, you’re not going to pay any tax unless you sell and that could be either short-term or long-term capital gains but one of the things that is part of kind of his new proposal is to introduce this idea of unrealized gains of, okay whatever the fair market value is even if you don’t sell you have to pay the tax on it to let’s say the tax 150 thousand dollars on these unrealized gains you have to find the cash to be able to pay for it otherwise you have to sell whatever that property is to pay off the taxes.
So, I just thought it was interesting that this is this was part of his latest proposal again it’s only affecting people with like more than 100 million dollars but just the concept of taxing unrealized gains where now people are going to be forced to liquidate some of their positions to help pay for taxes for things where they haven’t even sold it’s a little befuddling. So it’s just something that we’re watching I’m not a big fan of that as a concept but that said we’re 30 trillion dollars in debt and that’s going to be even larger with some of his budget proposals so somehow they have to come up with the taxes and taxing the ultra wealthy with this unrealized gains maybe that’s the answer but I’m just concerned about unrealized gains being a potential weight attacks for the rest of us that could be really concerning so that’s something that just stood out to me with the latest proposal and again this isn’t law or anything it’s just what they’re talking about. Thank you.