New Law Changes With Tom Black

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Hello and welcome to your retirement solution with tom. Black good morning tom. How're ya. I am doing great. It is a beautiful day with lots of opportunity absolutely happy new year by the way. This is our first recording. You and i in the in twenty twenty one. Yeah it's going to be Should be really interesting year. I we it has to be different. I don't know better but it has to be something has to change. I'm i'm really hoping for better and speaking of changes you're talking about that today a little bit. We're going to talk a little bit today about Proposed changes under the new administration and things that people ought to be thinking about nassir panicking about yet but just thinking about because of the lightning what we could see some changes dealing with the last couple of years all right and what kind of changes are we talking about specifically today. Well there's there's kind of a basset of multiple different ones. We've you may or may not have heard about the we're going to be seen some increases in taxes or some individuals and some of that depends on what happens with the so called trump tax break of twenty eighteen. One of the things have benefited everybody. That was included in there was a was the twelve percent tax bracket and that's been really beneficial to absolutely everybody who pays taxes and they're talking about on reversing those trump those tax bills. Which would mean that all of us. Potentially you know three percent more in taxes. Ghana still up on. These things are all in the air. But that's one of the first things we look at. We started talking about. How is this going to affect all of our clients in general or just individuals in general taxes. And that's the first thing that i was thinking about the other. Now that we know where georgia falls is that we could potentially be seeing other attached changes that can affect how you've been planning for your retirement or for the passing of your assets the next generation one of the ones that i am most interested in keeping an eye on for our clients is somewhat People either they've heard about it. They have no idea how this works. And it's called a step up in basis that you heard of this before i have but i don't quite understand all of it okay. So let's start with that with the basic idea. Let's say that Your parents bought calf dozen stocks in the sixties. And and they've held them ever since then. Well if your parents died in leave you those stocks you might be able you would be able to today. Turn around and sell those and pay no taxes on the gain you know. Maybe it's a million dollars with the gains okay. Yeah yeah yeah so i. If my parents were to sell them they'd have to pay yet. But if i if i inherit them then i don't that's correct. Well okay. that sounds good basis and you imagine people who are retired been retired for a while. who have some of these positions stock positions. If up well hail hold onto it. And if i die owning my kids will have to pay taxes on part of their narrates not a bad strategy. If you didn't need the money yeah problem now is all we're doing now is kicking the can down the road because if that does get refilled and that is really high on the list That can change. How you're going. You know how you plan on passing those assets so the kids. Oh yeah yeah. Yeah yeah and i was gonna say it seems to be almost a double edged sword there. Because if you're saying that they may change that and then if i in twenty years let's say i passed these stocks down to my kids and they have to pay taxes on them. We've we've already kind of seen the writing on the wall. That taxes are most likely going to be higher because we have to pay for all the debt that happened this last year with kobe. The relief and everything else in the trillions and trillions and trillions of dollars so that really changes the game not only does it bring those taxes back it. they'll probably higher. Don't you think absolutely. Oh boy i had this conversation with one of my clients In december and and in that situation they had About two million dollars in capital gains. And what was trying to get him. Understand was the taxes weren't going to get any cheaper and and we were better off to take the beating at which is approximately twenty four for them would have been about twenty four percent in taxes taxes any real by the stocks back but if pay taxes on it because it won't be cheaper in four years to pay the taxes mondo stocks if the gains continued to go. So it's it's a lot more complex than than just the the idea that you're right. It's going to get more experience so we know it is. It has to yeah not even last year. I mean we've been we've been spending money like drunken sailors for

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