The latest text of the proposed reconciliation bill, titled the Build Back Better Act, published on October 28, 2021, is void of many of the prior proposed tax changes that would have upended estate planning. Changes that were included in the earlier version of the bill but not in this most recent version include:

• Elimination of the “bonus” estate tax exemption
• Inclusion of grantor trust assets in the grantor’s estate
• Deemed realization event for sales to and from the grantor and a grantor trust, and
• Elimination of valuation discounts for transfers of nonbusiness assets

Still included, among other things, are a surtax on high-income earners, expansion of the 3.8 percent net investment income tax and a plan for greater IRS enforcement targeting wealthy taxpayers.    

Of course, there is much left in the process, and negotiations continue. We will continue to keep you informed as things evolve.