So I was just looking at some videos from investment youtubers I watch to keep up with the ridiculous myriad of ever changing tax code laws, and something kind of funny happened.
People in the comments were literally begging for Trump back and doing nothing but crap on xiden and talk about how they regret voting for him. I even saw lots of people talk about how they'll never vote democrat again because they've been betrayed for the last time. Amazingly, I say some people talk about switching to republican since at least then they can attempt to better their lives through investing
So I'll try not to get TOO technical since not everyone is a fan of learning tax codes. But basically xiden is trying to force through a bunch of tax reform bills that would eliminate the 1031 exchange and step-up basis portions of the tax code. Essentially what this does is make it harder for middle and lower class people to better themselves through real estate investing, while also limiting the ways they can pass on their life's work and accumulated assets to their kids when they die without them being forced to sell off most of it to pay for the "death taxes".
This has apparently gotten normies to wake up BIG TIME. Hit them in their wallet and tell them they're going to have to sell off 90% of their inheritance to pay for taxes, and suddenly Orange Man Good, becomes their new motto and the Ass party become the new literal satan.
I honestly don't know whether to laugh at the sheer stupidity, or be glad they're coming around to our general side.
The step-up basis and this are huge issues. Being able to pass on one’s hard-earned financial legacy to one’s children is a big deal to everyone with a portfolio.
Yup, I know I for one have absolutely ZERO desire for the government to steal my life's work from my kids and then piss it away on funding CIA terrorist cells or some other "legal" money laundering scheme.
Or buying children.
That's exactly my point. My parents are getting up there in age, as are my in-laws, and we will be inheriting combined estates solely. We're not talking 8 figures, but well into 7 figures. That tax will almost wipe out the estate.
Understood. And if your parents and in-laws are anything like mine were, they’ve been making important life and investment decisions based, at least in part, on the impacts of what those decisions would be to their inheritance to their children.
These issues, as OP and you pointed out, are going to wake up a lot more people.
Kind of an awkward conversation to have with your parents and in-laws, but should look into the trust loophole. Like I mentioned in another comment, it involves a lawyer and precise wording, but you can avoid paying any taxes this way since you're not inheriting anything, you're just being shifted from passive ownership, to active ownership.
Beyond awkward convo w/ my parents. They are crazy libs. Even talking about such a subject and I'll be accused of "wanting their money", even though I'm the sole heir. But yes, a trust would be smart.
Just show them the numbers. Show them how much of it would be completely obliterated otherwise. And then tell them how it is possible to avoid it with a trust.
Fluffmiceter is right. It would probably also help if you explain that you'd technically not have any right to any of their assets till they die. You'd just be a co-owner on paper, so as to get around the taxes.