With the upcoming 2024 presidential election on the horizon, both major political parties have outlined their visions for the future of U.S. tax policy. This article provides a comprehensive overview of the 2024 Republican Party's tax platform, focusing on estate taxes, capital gains taxes, the stepped-up basis rule, and real estate investment tools like 1031 exchanges. Although the official platform offers limited details, related proposals such as Project 2025 provide significant insight into the direction a Trump-Vance administration may take.

Estate and Inheritance Taxes: Silence Speaks Volumes

The Republican platform does not explicitly mention estate or inheritance taxes. However, based on the party's historical stance on reducing taxes and government intervention in personal finances, it is reasonable to expect that the current estate tax exemptions, as introduced in the 2017 Tax Cuts and Jobs Act (TCJA), would be extended or made permanent.

The TCJA significantly raised the estate tax threshold, reducing the number of estates subject to the tax. As of 2023, only 0.2% of Americans pay estate taxes. The Republicans are expected to continue this trend of minimizing taxes on wealth transfers, ensuring that fewer estates fall under the purview of these taxes.

Project 2025 proposes lowering the estate tax rate from 40% to 20%, further benefiting the wealthiest Americans. While estate taxes only impact a small fraction of the population, extending these cuts would likely increase the concentration of wealth in the hands of a few.

Learn more: Do Living Trusts File a Tax Return?

Capital Gains Taxes: A Focus on Maintaining the Status Quo

The Republican platform aligns closely with their historical approach to capital gains taxes. Republicans have long argued that lower capital gains taxes spur economic growth and incentivize investment, particularly among the middle class.

The Trump-era tax cuts, enacted under the TCJA, reduced capital gains tax rates and doubled the standard deduction. The 2024 Republican platform advocates for making these provisions permanent. In doing so, the party intends to maintain lower tax rates on capital gains, thereby promoting investment but potentially skewing benefits toward wealthier individuals.

Learn more: How to Minimize Inheritance, Estate & Capital Gains Taxes

Child Tax Credit: Proposals to Increase Benefits

The Child Tax Credit is one area where the 2024 Republican platform signals potential change. Although details are sparse, both the Republican and Democratic parties agree on increasing this credit. Republicans, through the lens of Project 2025, propose increasing the credit to as much as $5,000 per child. While this figure is yet to be confirmed, it marks a significant departure from the current $2,000 credit.

Expanding the Child Tax Credit is seen as a way to provide relief to families and encourage economic stability. However, the viability of such a substantial increase remains uncertain, depending on future negotiations with Congress.

Stepped-Up Basis: Preserving Generational Wealth

Another key topic in estate planning is the stepped-up tax basis, which allows heirs to use the market value of inherited assets at the date of death, rather than the initial purchase price, to calculate capital gains. This provision helps preserve generational wealth by minimizing capital gains taxes on inherited assets.

While the Republican platform does not specifically address the stepped-up basis, the party's broader stance on protecting wealth from taxation suggests that a repeal of this rule is unlikely. Preserving the stepped-up basis would continue to offer significant tax advantages to heirs, ensuring that wealth remains concentrated within families.

Learn more: California’s Scheme to Increase Your Property Taxes!

1031 Exchanges: Real Estate Investment Incentives

1031 exchanges, also known as like-kind exchanges, allow investors to defer capital gains taxes when selling a property and purchasing a similar one. While the Republican platform does not explicitly mention 1031 exchanges, the focus on reducing taxes and maintaining real estate investment incentives strongly suggests continued support for these tools.

The 2017 TCJA expanded the benefits of 1031 exchanges, and it is likely that a Trump-Vance administration would aim to preserve or even enhance these provisions. By doing so, Republicans would provide further incentives for real estate investment and wealth-building, particularly among high-net-worth individuals.

Learn more: 1031 Exchange Explained: Swap and Save!

Republican Economic Policies in 2024

In summary, the 2024 Republican platform, though light on details, signals a strong commitment to reducing taxes and fostering economic growth. Whether through extending the Trump Tax Cuts or preserving investment incentives like the 1031 exchange, the platform prioritizes minimizing tax burdens on wealth transfers and capital gains. With proposals from Project 2025 supporting these goals, a potential Trump-Vance administration would likely focus on preserving and expanding tax advantages for the wealthiest Americans.

As the election approaches, it will be essential to monitor how these policies evolve and what specific proposals emerge from each party. Taxpayers, particularly those engaged in estate planning or real estate investment, should remain informed about potential changes that could significantly impact their financial futures.

Learn more: 2024 Democrat Platform on Estate Taxes, Capital Gains, Step-up & 1030 Exchange

Read more: How Project 2025 Could Reshape Income, Estate, and Gift Taxes

BETHEL LAW CORPORATION
ESTATE PLANNING | ELDER LAW | BUSINESS PLANNING

CLICK HERE OR CALL US AT 909-307-6282 TO SCHEDULE A FREE CONSULTATION.