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On September 13, 2021, the House Ways and Means Committee released draft legislation that proposes a series of tax increases and tax cuts, which will undergo a round of markups by the Committee. Most tax proposals were anticipated, including the tax increase in capital gains; however, the Committee provided a few surprises.

High-net-worth individuals who are exploring charitable giving have many different options, but charitable remainder trusts and charitable lead trusts are two straightforward planning vehicles that will help them realize their giving aspirations among other benefits, including deferring long-term capital gains. While there is no wrong time to explore charitable giving options, with the capital gains rate expected to rise, these types of trusts become even more attractive.

The political landscape in the U.S. shifted significantly in 2021. With that change, many anticipate major revisions to the tax laws, which will likely make transferring wealth much more difficult. Before it’s too late, take advantage of the wealth planning techniques available to you.

Increased complexity has become the norm in the world of tax. From the passage of tax reform to new legislation allowing states to levy taxes on remote sales, tax executives have had to flex their agility to steer their companies through a multitude of challenges. Looking ahead, tax executives predict that disruption and change will not only continue but accelerate. Tax executives are up to the challenge, focused on managing their total tax liability, and transforming their operations to adapt to whatever lies ahead.

As negotiations continue, the latest text of the proposed reconciliation bill, titled Build Back Better Act, is void of many of the prior proposed tax changes that would have upended estate planning.

The Biden administration’s American Families and other tax proposals may complicate the tax landscape for high-income owners. Given the real possibility of targeted tax increases on the wealthy and President Biden earmarking $80 million for IRS audit efforts, business owners and family offices should review their current situations to identify opportunities in which their overall federal and state tax liabilities could be minimized.

While the gift and estate tax exemption is scheduled to drop to approximately one-half the current amount of $11.7 million on January 1, 2026, there are tax proposals in play that could change the estate and gift tax laws much sooner. Uncertainty abounds, but planning options still exist through various trust instruments, including gifting to the next generation in trust and implementation of a SLAT—spousal lifetime access trust.

The proposed Build Back America Act, a $1.85 trillion social-policy and climate framework, is working its way through Congress. While the notable prior proposals were absent, the current legislation proposes a new income tax surcharge that will be added on top of the ordinary and capital gains tax rates. The surcharge—which can bring the total surtax to 8% for certain groups—will also apply to trusts and estates and will impact high-earning individuals. Unless otherwise provided, all proposals are effective January 1, 2022.

Family offices anticipating a variety of tax law changes now have more details to consider. How would the tax law changes proposed by the House Ways & Means Committee affect family offices and wealthy families? Tax specialists examine the considerations, including the surcharge on high-income individuals, estates, and trusts that would be effective for years beginning after December 31, 2021.

Residency changes are often fraught with uncertainty from a tax perspective. States are not known for easily letting go of tax revenue and will often fight hard to keep it. If you have you relocated recently or are considering a move, it’s important to understand why your move may put you at high risk for an audit.