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Tax and Business Planning advisor Wes Lyon sits down with editor John K. McGill to discuss President Biden’s proposed tax law changes.
After reviewing the Biden administration’s Green Book, they outline which potential changes will affect doctors the most, including:
- The increase to the top marginal individual income tax bracket
- Capital gains being taxed as ordinary income (if income over $1,000,000)
- Property transfers (gifts and at death) being treated as sales where capital gains will be taxed
- New limits on 1031 like-kind exchanges
- Increased IRS funding
The effective date for these changes is slated for December 31, 2021, but if passed into law, there’s talk about a retroactive start date of April 28, 2021, which was the date of Biden’s announcement.
Most assuredly, doctors selling their practice will be affected. But Mr. McGill reminds doctors of the “binding contract exception.” Lyon also warns against syndicated easements, since these are a “listed transaction” that will put a definite IRS target on your back. Plus, with new funding, there will be a tremendous increase in audit rates as the IRS attempts to close the ever-growing tax gap—so get ready because the taxman cometh!
The McGill Advisory content is provided for informational purposes only and does not constitute legal, accounting, or other professional advice.
Copyright © 2022 John K. McGill & Company, Inc.