Required Bank Reporting?
Last week, Janet Yellen and IRS Commissioner Charles Rettig pushed to change the reporting standard from banks to include annual inflows and outflows from accounts with more than $600 or at least $600 worth of transactions. This would allow for the IRS to target audits more effectively, allowing the Internal Revenue Service to generate more funding for government spending.
After receiving high levels of opposition from banks and credit unions, House Democrats decided to omit the proposal from their list of tax-policy changes last week. Even though this proposal was passed upon, we may still see something of this nature come into play, however, likely with a higher threshold than $600.
Jobless Claims Remain Near Pandemic Low
There was a slight increase in jobless claims last week, however, this number remained near a pandemic low. It was reported that claims rose to 332,000; a slight increase from the week prior of 312,000. Hurricane Ida had a large effect on this, as layoffs made up the majority of this small jump.
There are still several factors keeping people home from work; including but not limited to COVID-19 related issues, increased child-care responsibilities, and extended unemployment benefits. However, with many American’s recently losing their enhanced unemployment benefits such as an additional $300 weekly supplement to state benefits; there is hope that unemployment will continue to drop lower and lower as these issues and benefits expire.
Capital Gains Tax Trouble
Previously, Biden put forward a proposal to tax unrealized capital gains upon death. This policy would tax appreciated values of homes, businesses, and stocks when the original owner dies. This is the opposite of the current policy which allows for a step-up in basis as well as only being taxed when the heir sells an asset. There is now a counter to this proposal by many who are not in agreement with this method of taxing capital gains.
Some Democrats are now seeing a carry-over basis as a way to tax capital gains while staying within reason. The carry-over basis essentially would still eliminate the step-up in basis, but take away the possibility of being taxed at death. This would mean the heirs would only have to pay tax on the gain when they sell, however, they would be taxed at the amount the asset appreciated since its original purchase.