First, the President announced that he wishes to raise the capital gains tax rate from the current 23.8% to 28%. He also announced that he will be seeking to close what some have called the biggest loophole in the tax code, allowing people to inherit appreciated investments without paying capital gains tax on it.
For example, currently if someone inherits a stock certificate that was purchased for $100 and is now worth $5000, no capital gains tax is due. The President wants to change that to make it so capital gains tax would be due as part of the deceased’s final tax return. He is proposing an exception that no capital gains tax would be due until a surviving spouse dies and an exemption for the first $100,000 for single people, which doubles for married couples.
If these proposals were to pass, the implications would be huge. However, it is very unlikely that either proposal will make it through the current Congress.
