Trump is considering a tax break that would be a boon for real estate

Posted on Posted in Investment & Financing, Investment Niches

President Trump is considering a tax break that would link capital gains to inflation.

Such a change would cut tax bills for investors selling real estate or stock by adjusting the original purchase price for inflation. For example, under current law, corporate stock with dividends held for a decade would be subject to a tax rate of 24.3 percent. When indexed to inflation, that rate falls to 21.4 percent, according to estimates by the Congressional Research Service. The exact rate would vary depending on the asset and how long it was held, but regardless, there would be a several percentage point tax deduction.

The change might not sit well with some of Trump’s supporters since more than 63 percent of the break would go to the top .1 percent of taxpayers. And over the next decade, the benefit would cost more than $102 billion, according to the Penn Wharton Budget Model.


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