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The National Association of REALTORS®’ Federal Taxation Committee yesterday voted unanimously to amend current estate tax policy. Under the policy recommendation, which will be considered by the NAR Board of Directors May 14, the association would support an estate tax exemption no lower than $11.7 million per person, which is the current law exemption, and oppose a tax on unrealized gains at a person’s death.
The action, taken during the REALTORS® Legislative Meetings & Trade Expo, held virtually, is pending approval by the NAR Board of Directors on May 14. If approved, the motion becomes the official policy of NAR and its lobbyists.
The estate tax has varied widely over the past 25 years. Under current law, the nearly $12 million exemption would revert to $5 million (plus adjustment for inflation) in 2026.
The committee motion comes after the Biden administration last week proposed the American Families Plan, which, besides raising the top income tax rate on very high earners to 39.6%, would tax more than $1 million in unrealized capital gains at death, effectively lessening the amount that could be inherited. The adminstration’s proposal would still allow heirs to realize the step-up in basis to fair market value on inherited assets.
These and other proposed tax changes would help pay for the second round of infrastructure legislation the White House is recommending to Congress.
Still, NAR’s Director of Federal Tax Policy Evan Liddiard cautioned the committee that much of what the administration proposed will be different if and when it’s haggled over in Congress.
The Federal Taxation Committee is examining infrastructure proposals from both the White House and Republicans to ensure funding for the measures don’t adversely affect the real estate industry or individual real estate investors.
