At KROST and our associated wealth management firm, KROST Wealth, our goal is to provide you with timely news and insights. As we venture into the next presidential election, it is important to note the differences between the two candidates’ tax proposals as we look toward the next four years.
As one may suspect, each candidate’s proposed plan differs drastically from the other with unique impacts on individuals and businesses depending on the outcome of this race. Below we’ve compiled a high-level overview of some of the major facets of each platform with some of our own insights along the way.
Incumbent President Donald Trump | Former Vice President Joe Biden |
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Individual Tax Rates | |
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KROST Insight | |
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Capital Gains & Step Up in Basis | |
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KROST Insight | |
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Tax Credit for Retirement Savings | |
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KROST Insight | |
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Pass-through Business Income | |
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KROST Insight | |
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Carried Interest | |
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Corporate Tax Rates | |
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KROST Insight | |
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Payroll Taxes | |
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There are many actionable planning strategies to employ to safeguard your wealth depending on the outcome of the election. Below is an overview.
Financial Strategies to Consider Should We Re-elect President Donald J. Trump
- Consider exploring strategies to hedge rising taxes in the future. Strategies include:
a. Roth Conversions
b. Life Insurance, during retirement and legacy to children - Develop Charitable Remainder Trusts for income in retirement
- Gift appreciated assets instead of cash to avoid capital gains
- Grantor Retained Annuity Trusts
- Review Beneficiary designations on retirement accounts to understand the effect of Secure Act on stretch IRA rules
- Consider investments that allow QBI deduction (199A)
Financial Strategies to Consider Should We Elect Former Vice President Joe Biden
- Consider accelerating capital gains before expiration in 2021
a. Consider Qualified Opportunity Zones to offset capital gains
b. Long held stocks may have appreciated, understand the effect of concentrated stocks in a portfolio - Understand how Like Kind Exchanges may affect your long-term real estate investments
a. Consider DSTs or Qualified Opportunity Zones - Grantor Retained Annuity Trusts
- Accelerate gifting strategies (including discounts for lack of control and lack of marketability) in 2020 to avoid lower exemption amount in 2021
- Take advantage of higher gift exemptions with Irrevocable Life Insurance Trusts in 2020
- Offset Net Operating Losses with Roth Conversions
Questions about wealth management and your taxes? We can help. Contact us today at KROSTWealth.com for a consultation with our team of experts.
Securities offered through Avantax Investment ServicesSM, Member FINRA, SIPC. Investment advisory services offered through Avantax Advisory ServicesSM. Placing business through Avantax Insurance AgencySM and Avantax Insurance ServicesSM CA license #0M36260.
About the Author
Philip Clark, CFP®, CPWA®, Director
Wealth Management
Phil joined KROST, a tax and accounting firm based in Greater Los Angeles, as their Director of Wealth Management for their newly formed practice KROST Wealth. In his new role, Clark focuses on Financial Planning for business owners, Hollywood professionals, executives, and affluent families with a mission to create opportunity and add value to his clients’ lives. » Full Bio