Green Book Proposals Related to Estate and Gift Tax By: Samuel Olchyk and Allison R. Church Samuel Olchyk and Allison R. Church from Venable LLP highlight key estate and gift tax proposals from the Treasury Department’s General Explanation of the Administration’s Fiscal Year 2023 Revenue Proposals – the 2023 Treasury Green Book. On March 28, the Biden administration released its budget recommendations for fiscal year 2023 (which begins this October 1). The budget calls for nearly $5.8 trillion in spending during the upcoming fiscal year, offset by $4.6 trillion in revenues. The revenue proposals are described in the Treasury Department’s General Explanation of the Administration’s Fiscal Year 2023 Revenue Proposals (commonly referred to as the Treasury “Green Book”), which accompanied the budget recommendations. A number of these items affect estate and gift tax-related issues. Here are a few key items to note regarding these proposals.
#1. The Green Book incorporates the Build Back Better Act that was passed by the House of Representatives in 2021 in the baseline. Typically, the spending and revenue proposals reflect an administration’s fiscal priorities for the upcoming fiscal year. But that is not necessarily the case this year. In light of the ongoing discussions surrounding last year’s House-passed “Build Back Better” legislation, the Green Book states that the administration’s proposed revenue proposals utilize a “baseline that incorporates all revenue provisions of Title XIII of H.R. 5376 (as passed by the House of Representatives on November 19, 2021) [other than the SALT proposal].” In other words, this budget package assumes the enactment of the revenue provisions in the “Build Back Better Act”; the revenue proposals in the Green Book are additional revenue proposals. Many of these proposals were described in last year’s Green Book (for fiscal year 2022) and were considered but not included in the House-passed Build Back Better Act. #2. The Green Book would alter the taxation of capital gains. The proposals would treat death or the gift of appreciated property as a realization event, resulting in capital gains tax being incurred immediately upon such an event. Each individual would receive a $5 million lifetime exclusion. Additionally, the Green Book would tax capital gains for highincome earners (over $1 million) at ordinary income rates and
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