How it works: Biden proposes to cut in half the unusually generous cap of about $23 million that a couple can leave to heirs tax-free. This means gift and estate taxes, which can climb to 40%, would kick in at much lower dollar amounts.
“People are making extraordinary gifts before the end of the year, getting those amounts out of their estate,” says Joe Maier, an estate and succession planning attorney at the Johnson Financial Group in Racine, Wisconsin.
If Biden wins, tax professionals expect an even greater stampede of customers who want to make gifts, set up trusts, and establish philanthropic vehicles called donor-advised funds (DAFs) — all before Dec. 31.
Family business owners who have been flirting with selling their companies are making a big rush to the exits, since it takes months to close such a deal — and waiting until next year could mean paying 40% in taxes on the transaction vs. 20% this year, Maier tells Axios.