HOUSE WAYS AND MEANS COMMITTEE RELEASES INITIAL TAX PROPOSALS
Income Tax Provisions
Section 1202 – Qualified Small Business Stock
Top Marginal Individual Income Tax Rate
Net Investment Income Tax
Qualified Business Income
Excess Business Loss Limitation
Surcharge on High-Income Individuals
Transfers Between Deemed Owner and Irrevocable Grantor Trust
Estate and Gift Tax Provisions
Estate Tax Basic Exclusion Amount
Annual Contributions to Plans
Minimum Required Distributions from Plans
Roth Rollovers and Conversions
“Back Door” Roth IRAs
IRAs and Accredited Investor
IRAs and Self-Dealing
To prevent self-dealing, the proposal would expand the definition of “prohibited investments” in an IRA to include investments in which the IRA owner has a substantial interest. A substantial interest is defined as (a) a direct or indirect interest in investments not tradeable on an established securities market in which the IRA owner has at least 10% of the (i) combined voting power or value of all classes of stock, (ii) capital or profits interest of a partnership, or (iii) beneficial interest of a trust or estate; or (b) a corporation, partnership, or other unincorporated enterprise in which the IRA owner is an officer or director (or holds a similar position). The proposal makes this provision a requirement to be a valid IRA.
- Repeal of the temporary limitation on personal casualty losses.
- Expansion of the wash sale rules to include foreign currency, commodities, and digital assets. The rules also would apply to acquisitions by certain related parties including the taxpayer’s spouse, dependents, taxpayers to whom the taxpayer is a dependent, entities controlled by the taxpayer or related party, 529 plans and Coverdell education savings accounts where a related party is the beneficiary, and certain 401(a), 403(a), 403(b), and 457(b) plans where the taxpayer or related party can make investment decisions.