https://www.marketwatch.com/st...
Higher maximum rate
The pre-election Biden
tax plan would raise the top individual federal income rate on ordinary
income and net short-term capital gains back to 39.6%, the top rate
that was in effect before the Tax Cuts and Jobs Act (TCJA) lowered it to
37% for 2018-2025. Biden also said he would generally raise taxes on
folks with incomes above $400,000 without supplying specifics.
2.
Itemized deductions
Biden has said he
would limit the tax benefit of itemized deductions to 28% for
upper-income individuals. In other words, each dollar of allowable
itemized deductions could not lower your federal income tax bill by more
than 28 cents, even if you are in the proposed 39.6% maximum tax
bracket.
For upper-income individuals, Biden would reinstate the
pre-TCJA rule that reduces total allowable itemized deductions above the
applicable income threshold. Allowable deductions are reduced by 3
cents for every dollar of income above the threshold.
Biden would eliminate the TCJA’s $10,000 cap on itemized deductions for state and local taxes.
6.
Elimination of real-estate tax breaks
The
Biden tax plan would: (1) eliminate the $25,000 exemption from the
passive loss rules for rental real estate losses incurred by
middle-income individuals, (2) eliminate Section 1031 like-kind
exchanges that allow deferral of capital gains taxes on swaps of
appreciated real property, (3) eliminate rules that allow faster
depreciation write-offs for certain real property, and (4) eliminate
qualified business income (QBI) deductions for profitable rental real
estate activities.
