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BREAKING NEWS - TAX ALERT

Every taxpayer negotiating a sale who has NOT signed a binding contract yet must contact their tax advisors and attorneys today.

The House Ways and Means Committee released their proposal regarding potential tax changes today. The proposal provides for a binding contract exception with respect to the date which the increase capital gains rate would be effective to such taxpayer. The proposal still needs to be voted upon and is subject to further changes.

Assuming the law is passed as proposed, it appears from the language as currently drafted that the binding contract must be entered into by today.

If someone is considering changes to their portfolios, any publicly traded security would need to be traded before the market closes today.

Here is the text of the proposed legislation:

(2) SPECIAL RULE FOR BINDING CONTRACTS ENTERED INTO PRIOR TO SEPTEMBER 13, 2021.—
For purposes of paragraph (1), a gain recognized in the taxable year that includes September 13, 2021, shall be treated as being with respect to the portion of such taxable year on or before such date if such gain arises from a transaction which occurs pursuant to a written binding contract entered into on or before such date (and which is not modified thereafter in any material respect).

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