Tax Reforms After Virginia and New Jersey Elections

Political pundits are asking an excellent question after the recent elections. Is the Build Back Better Act moving forward, or will it be further pared down or abandoned?

Some pundits claim the Act will be scrapped as Members of Congress in swing districts fear for their political longevity in voting for the Build Back Better Act. Before election results rolled in, House leadership informed the media that votes would begin later this week on the Act plus the Senate’s infrastructure bill. Senate leadership said it would begin voting on the Build Back Better Act in the near future. However, at the moment, there are more questions than answers and from recent news, it seems as if the next steps are still uncertain.

You might be asking why does all this matter? As previously summarized, we mentioned that several estate planning techniques are on the chopping block with elimination on the date the Build Back Better Act becomes law. The Act permits all pre-date of enactment trusts and transfers. Thus, if you consider making gifts to grantor trusts or transferring interest in real property for valuation discounts, those transactions must be complete before the Build Back Better Act becomes law.