Family Business Survival Strategies in an Era of Sweeping Tax Reform kiplinger.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from kiplinger.com Daily Mail and Mail on Sunday newspapers.
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Blank Rome’s annual estate and tax planning newsletter discusses certain concepts and techniques that should be considered in 2021 by our clients and friends in California. We first discuss perhaps the most important recent development, which was the outcome of the 2020 “Blue Wave” Election that gives the Democratic Party control of the presidency and Congress. In view of the massive federal bailouts that have occurred and are likely to occur this year, it seems logical to assume that significant changes (increases) to the tax burden on many individuals will be enacted. President Biden has proposed a series of sweeping tax changes as outlined below.
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California voters approved Proposition 19 in November 2020, which updates California s long-standing property tax reassessment rules. There are two major provisions of Prop 19:
Parent-Child Exclusion
The first major update limits the scope of Proposition 58, the parent-child exclusion,
1 which goes into effect on February 16, 2021. This change, which is discussed in more detail below, (1) eliminates the $1 million assessed value reassessment exclusion as to a parent-child transfer of non-principal residence property and (2) substantially limits the parent-child transfer reassessment exclusion as to a principal residence.
Any gifts under the pre-Prop 19 rules must be made no later than February 15, 2021. Accordingly, some individuals may wish to consider gifting California real property sooner than otherwise planned and transferring to children (or trusts for exclusively children) California real property held in a qua