Biden Green Book Proposes Income Taxation Of Gifts And Bequests In Addition To Existing Estate and Gift Tax Regime

April 12, 2022 - Participants Include:

Virginia La Torre Jeker - @VLJeker

John Richardson - @ExpatriationLaw

Note: This podcast is based on a blog post published today here.

 

The Biden Administration recently released its Green Book of tax proposals. Although not likely to become law soon, the Green Book often provides advance notice of major changes in the US tax system. On page 31, the administration proposes to completely change how gifts are taxed. This change is introduced with the title:

"Treat transfers of appreciated property by gift or on death as realization events"

 

The basic idea is to follow Canada and Australia and treat gifts/bequests as "deemed sales" made at the time of the gift. The gift would take place at fair market value. In other words, an ordinary gift might generate a taxable capital gain.

In this podcast Virginia and I discuss:

 

- how this creates a  new and additional tax on gifts and bequests

- how the new tax would work

- how this might interact with the existing Estate and Gift tax regime

- why this might be a particular problem for Americans abroad

- why Americans abroad considering making gifts might consider making those gifts sooner rather than later.