SBLC Alert - White House releases fact sheet for The American Families Plan

Recently, the White House released its new fact sheet detailing the basics of The American Families Plan that President Biden will formally roll out. 

As you will see, all of the new tax revenue raisers are outlined at the bottom.  The proposal includes eliminating the step up in basis at death – but with a $1m exclusion of gain with an additional $250k for a personal residence for each person (this would mean an exclusion of $2.5m for a couple).  There is also apparently a deferral of tax for family owned businesses and farms being run by “heirs” – there are no other details on this deferral for family owned businesses.  At this point, our best guess is that the heirs would receive the carry over basis in the property and that death would not trigger the gain, rather a sale of the business. Until we have more details it is too early to tell how valuable this provision will be to family owned businesses, farms and ranches.

The proposal would also increase the income tax rates for those making more than $400k, (at least one source says this includes households of joint filers earning more than $400k!) up to a 39.6.  Some report that the 199A deduction for pass-through entities would be eliminated for these same individuals or possibly households.  Also, cap gains will be taxed at ordinary income tax rates for people with $1m of income, plus the Obama net investment tax of 3.8%.  There are rumors that some of the Tax Cuts bill provisions, such as the doubling of the estate tax exemption, will end earlier than January 1, 2026.

Of course, we will be analyzing this fact sheet and any additional information from the Administration in detail and will provide further updates as appropriate.