Planning implications of Obama's budget in one simple chart

Michael Kitces explains how the president's fiscal 2017 budget affects retirement, estate and other tax law

Feb 12, 2016 @ 1:04 pm

By Ellie Zhu

In the fiscal 2017 budget proposal President Obama sent to lawmakers Tuesday, he revived some ideas that appeared in previous budgets, such as limiting the amount of money that can build up in tax-favored retirement accounts.

Michael Kitces rounds up key changes to retirement, estate and other tax laws the president seeks with his budget request.

(More on Obama's proposal to curb retirement-savings tax incentives)

President Obama's budget crackdowns
RETIREMENT PLANNING Prevent Roth conversions of after-tax dollars (eliminate backdoor Roth contributions) Add required minimum distributions at age 701/2 for Roth accounts Require 5-year rule for non-spouse IRA beneficiaries (eliminate stretch IRA) Prevent new retirement contributions for those with >$3.4M in account balances Repeal net unrealized appreciations rules for employer stock in an employer retirement plan
ESTATE PLANNING Establish 10-year minimum term for grantor retained annuity trusts Require property sold to an intentionally defective grantor trust to be included in the estate Create 90-year maximum term to prevent dynasty trusts Limit total present interest gifting through Crummey powers Eliminate step-up in basis, replaced with deemed-sale-at-death rules
OTHER INCOME TAX "LOOPHOLE CLOSERS" Limit 1031 like-kind exchanges of real estate to maximum $1M gains deferral Require average cost for all stock sales (no more specific lot identification or FIFO/LIFO choices) Apply 3.8% Medicare surtax on investment income to passive S corp dividends Limit transfer-for-value rules for buyers of life settlements
Source: Michael Kitces. View his full story here.

0
Comments

What do you think?

View comments

Recommended for you

Latest news & opinion

DOL Fiduciary Rule: What you need to know about Acosta's decision

Labor Secretary Alexander Acosta confirmed that the agency's fiduciary rule will become applicable on June 9. Find out what advisers and firms should know when it goes into effect.

Acosta declines to extend delay of DOL fiduciary rule

Labor Secretary finds no legal basis to delay implementation; rule to become applicable June 9

Phyllis Borzi says opponents of DOL fiduciary rule face uphill climb to further delay or dilute it

Former assistant Labor secretary who crafted the rule says President Trump won't be able to get rid of it simply because he doesn't like it.

Advisers go on the offensive, getting clients ready for the next market correction

Some proactive planners are spelling out for clients the impact of a 10% or 20% correction.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print