On November 3, the House Rules Committee updated the October 28 revised reconciliation bill for the Build Back Better Act – H.R. 5376, which differed from the original draft released on September 13. Below is a summary of the changes:

Income and Investments

  1. The top individual tax bracket remains 37% (versus an increase to 39.6%).
  2. Enacts a 5% surtax on modified adjusted gross income over $10,000,000, and an additional 3% surtax on modified adjusted gross income over $25,000,000 (versus a 3% surtax on incomes above $5,000,000). Trusts and estates will be subject to lower thresholds at $200,000 and $500,000 of MAGI (newly added).
  3. The top capital gains tax rate remains 20% (versus an increase to 25%).
  4. Expands the 3.8% net investment income tax for taxpayers earning over $500,000 (married filing jointly) and $400,000 (single filers) to include all pass-through income (above and beyond investment income and wage income) (no change here).
  5. Keeps the qualified business income (199A) deduction as is, even for high income taxpayers (versus limiting QBID for higher income earners).
  6. Extension of higher refundable child tax credit.
  7. Investment in increased IRS enforcement.


  1. Lifetime gift/estate/GST tax exemption will not decrease in 2022 (versus a reduction from $11.7M per person in 2021 to $6M per person in 2022).
  2. Irrevocable grantor trusts remain outside the grantor’s taxable estate (versus including irrevocable grantor trusts in the grantor’s taxable estate if funded after the bill becomes law).
  3. Sales and exchanges between the grantor and grantor trust remain non-taxable events (versus taxing sales and exchanges between grantor and grantor trusts if they occurred after the bill becomes law).
  4. Stepped-up basis at death remains in place (no change here).


  1. The flat corporate income tax of 21% remains in place (versus an increase to 26.5% for those with incomes above $5,000,000).
  2. Imposes a 15% alternative minimum tax on corporations with three year average income over $1 billion (newly added).
  3. Introduces a 1% non-deductible surcharge on certain stock buy-backs completed by publicly traded corporations (newly added).
  4. No acceleration of limits on deduction of compensation above $1,000,000 for top five most highly compensated employees at publicly held companies (remains scheduled for end of 2026 versus 2022).
  5. Unfavorably modifies various other provisions, including IC-DISCs, global minimum tax, base erosion anti-abuse tax, and foreign derived intangible income.
  6. Qualified Small Business Stock (QSBS): Effective September 13, the 75 percent and 100 percent gain exclusions on the sale of QSBS stock would no longer be available (i) for taxpayers whose adjusted gross income (AGI) is equal to or greater than $400,000 or (ii) if the taxpayer is a trust or estate. Those taxpayers would still be eligible for a 50 percent QSBS gain exclusion (no change here).


  1. Starting 2029, contributions to IRAs with balances of over $10 million are not allowed and distributions are required once account values reach that threshold.
  2. Starting 2022, conversion to Roth IRAs of after-tax contributions to qualified plans are not allowed.
  3. Starting 2032, Roth conversions of IRAs and employer-sponsored plans for high income taxpayers are not allowed.


  1. Valuation discounts on transfers of non-business assets are still allowed (versus elimination of valuation discounts). Nonbusiness assets are passive assets that are held for the production of income and not used in the active conduct of a trade or business such as family investment LLCs or LPs.
  2. Applies wash-sale and disguised sale rules to cryptocurrency (no change here).
  3. State and Local Tax (SALT) deduction: Starting 2021, SALT deduction cap increases from $10,000 to $80,000, with that new SALT deduction cap in place through 2030.

For more information, or if you have any questions, visit us online at www.wealthspire.com or contact a member of the Wealthspire team.


Updated November 8, 2021.

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Richard Yam, J.D.

Rich is senior vice president of trusts & estates, and is based in our New York office.