The Wall Street Journal reports:
President Biden’s expected $6 trillion budget assumes that his proposed capital-gains tax rate increase took effect in late April, meaning that it would already be too late for high-income investors to realize gains at the lower tax rates if Congress agrees, according to two people familiar with the proposal.
Mr. Biden’s plan would raise the top tax rate on capital gains to 43.4% from 23.8% for households with income over $1 million. He would also change the tax rules for unrealized capital gains held until death.
Source: https://www.wsj.com/articles/biden-budget-said-to-assume-capital-gains-tax-rate-increase-started-in-late-april-11622127432
This would be a very unpleasant surprise to households that may have wanted a chance to lock in some gains before any higher tax rates went into effect. Also notable that since it would be retroactive to April 28, 2021, it could influence many folks who took gains during the latest crypto surge.
We’ll have to wait and see if this makes it through Congress.
For what it’s worth, Jeff Levine, Lead Financial Planning Nerd for Kitces.com, gives this “an EXTREMELY small chance of happening.”
However, others are less convinced:
