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Tax Updates and Planning Ideas for 2022



As we launch into the second quarter of the year, there are many new and proposed laws which impact or may impact businesses and wealthy individuals. Lobb & Plewe will do our best to keep you updated as we move forward.

Proposed Federal Tax Law Changes:

On March 28, 2022, President Biden released his fiscal year 2023 budget (the “2023 Budget”) which consists of approximately $5.7 trillion in spending. The U.S. Treasury has released the “Green Book,” which provides details related to revenue provisions in the 2023 Budget. The revenue proposals in the 2023 Budget rely on a baseline that presumes enactment of the revenue provisions in the Build Back Better Act (the “BBBA”) as passed by the House of Representatives on November 19, 2021.

The revenue proposals described in the Green Book are intended to be in addition to the provisions in the BBBA. This is a curious story line because the BBBA stalled in the Senate at the end of 2021 and never became law.

It is up to Congress to pass a budget so the revenue proposals in the 2023 Budget may be included in future legislation. The way the proposed budget is being presented by the Administration appears to be a plea for Congress to enact pieces of the BBBA in order to declare a win in the context of the failed proposed legislation in 2021.

To raise revenue to pay for the spending contained in the FY2023 Budget, high-net-worth individuals and businesses are the piggy bank. The focus of the revenue raising proposals, encompass raising individual tax rates, raising capital gain and qualified dividend rates, taxing exchanges between grantors and grantor trusts, imposing restrictions on grantor retained annuity trusts and taxing dispositions of appreciated property at death. A summary of the proposed changes of interest to high-net-worth individuals include the following:

  • An increase in the C corporation tax rate from 21% to 28%.
  • An increase to the top marginal individual income tax rate from 37% to 39.6%. For taxable year 2023, the rate would apply to taxable income over $450,000 for married individuals filing jointly ($225,000 for married individuals filing separately), $425,000 for head of household filers and $400,000 for single filers. This proposal will be effective for taxable years beginning after December 31, 2022.
  • A limitation on gain deferred under IRC section 1031 to $500,000 for a single filer and $1MM for married individuals filing a joint return per taxpayer per year.
  • The imposition of ordinary income tax rates on long-term capital gains and qualified dividends for taxpayers with taxable income exceeding $1MM. If the proposal for raising the ordinary income tax rate to 39.6 % becomes law, then the maximum tax rate on capital gains would effectively be 43.4% (39.6% plus net investment income tax rate of 3.8%).
  • The application of ordinary income tax rates and self-employment tax for partners with taxable income from all sources exceeding $400,000. This subjects a partner’s allocable share of income from profits interests in investment partnerships such as carried interest to tax as ordinary income and self-employment tax regardless of the character of the income at the partnership level.
  • A wealth tax which consists of a minimum tax of 20% on taxable income, inclusive of unrealized capital gains, for taxpayers with a net worth in excess of $100 million. Payments of the minimum tax will be treated as a prepayment available to be credited against taxes on future realized capital gains. The minimum tax liability in subsequent years will equal 20% of (1) the taxpayer’s taxable income and unrealized gains reduced by (2) the taxpayer’s unrefunded, uncredited prepayments and regular tax. The tax due for the first year can be paid in nine equal annual installments. For subsequent years, the minimum tax could be paid in five equal annual installments.
  • The proposal does not eliminate the $500,000 exclusion currently available to joint filers nor the $250,000 for unmarried filers, upon the sale of their principal residence. It also does not eliminate the current exclusion on the sale of qualified small business stock under IRC 1202.

Estate Planning Changes:

Once again, the Administration seeks to limit estate tax planning. The proposal includes the following in the context of estate planning:

Transfers of appreciated assets by gift or death will be treated as realization events subject to capital gains tax, subject to a $5MM per donor lifetime exclusion. The proposal to tax unrealized capital gains on transferred appreciated property upon the occurrence of certain realization events, include:

  • Transfers of appreciated property by gift.
  • Transfers of appreciated property on death.
  • Transfers of property to, or distributions of property from, trusts, other than wholly revocable trusts.
  • Distributions of property from a revocable grantor trust to any person other than the deemed owner or U.S. spouse of the deemed owner, other than distributions made in discharge of an obligation of the deemed owner.
  • Terminations of a grantor’s ability to revoke a trust at death or during life.
  • Transfers of property to, and distributions of property from, partnerships or other non-corporate entities if the transfer is a gift to the transferee.
  • Recognition of gain on the unrealized appreciation of property held by trusts, partnerships or other non-corporate entities.

The proposal allows for some exclusions which include the following:

  • Transfers by a donor or decedent to a U.S. spouse will not be a taxable event, and the surviving spouse will receive the decedent’s carryover basis. The surviving spouse will recognize the gain upon disposition or death.
  • Transfers to charity will not generate a taxable capital gain. Transfers to a split interest trust, such as a charitable remainder trust, will generate a gain with an exclusion allowed for the charity’s share of the gain. Transfers of tangible personal property, such as household furnishings and personal effects are excluded. This exclusion does not include collectibles.
  • Once a donor has exhausted the lifetime gift exemption, the proposal allows a $5MM per donor exclusion from the recognition of additional unrealized capital gain on property transferred by gift or held at death. Any unused exemption by a deceased spouse would be portable to the surviving spouse, effectively making the exclusion $10 million per couple. This additional exclusion amount would be indexed for inflation after 2022. The transferee’s basis in the property shielded by this exemption will be the fair market value of the property at the time of the gift or the decedent’s death.

If passed into law, the proposal will be effective for transfers by gift, and on property owned at death by decedents dying after December 31, 2022, and on property owned by trusts, partnerships and other non-corporate entities on January 1, 2023.

The proposal allows payment of the tax on the appreciation of certain family owned and operated businesses to be deferred until the business is sold or ceases to be family owned and operated. The capital gains tax on appreciated property transferred at death is eligible for a 15-year fixed rate payment plan. Family businesses electing the deferral will not be eligible for the payment plan. Furthermore, contributions of appreciated property to charitable remainder trusts, will no longer have the favorable tax treatment afforded under current law.

Planning in 2022:

We are back to the same looming uncertainty experienced in 2021 as to how to plan for taxable events and estate tax. Because of Democrats not coming together to support the full BBBA, the manner in which the BBBA has been delivered to Congress by the Administration, it is clear the Administration is looking for pieces of the BBBA to be consumed in the final budget. Some of the “pieces” such as the wealth tax have been altered, but the underlying theme of raising taxes on companies and individuals to cover the massive budget remain. Which pieces will survive? Guessing could be costly so my mantra of “plan for the worst and hope for the best” will be repeated this year.

As to the changes in tax rates, planning early is best. If the changes in capital gains are to occur, the changes may be made with a retroactive effective date. This was the push by Democrats in 2021. Contrary to the opinion of some legal pundits, Congress can enact retroactive tax legislation. The Supreme Court unanimously upheld a retroactive increase in the estate tax rate in the 1994 case of United States v. Carlton. There are a few hurdles, but it can be done.

As to estate tax planning, many people began the creation and funding of grantor trusts in 2021 but did not complete the effort when it became clear the BBBA was not going to get through the Senate. If you have begun the process of creating and funding a grantor trust, it is a good idea to pick up where you left off.

If you have not begun the process, now is the time. Like 2021, professional advisors assisting clients with estate planning will become overloaded with work and may stop taking in new matters earlier in the year than normal.

In the context of estate planning, the revenue generating provisions of the 2023 Budget materially alters the rules for recognition of income when it comes to capital assets. Under current law, there generally must be a sale or exchange of property to generate a capital gain. The proposal will “deem” a sale when there was no sale. You must consider an estate’s likely liquidity. To pay the tax, the taxpayer will need cash to pay the capital gains tax. If the estate will not have sufficient cash, life insurance options must be considered.

Sales between a grantor and the grantor’s intentionally defective trust are not currently taxable events. The proposal will recognize such sales and require the seller to recognize gain on the sale of appreciated assets. It is imperative to understand the size of a taxable estate under the current rules as opposed to the rules which will exist if the 2023 Budget is passed in order to evaluate the planning which needs to be accomplished. An updated financial plan will be a great place to start.

The proposal will overturn IRS Revenue Ruling 85-13, which disregarded transactions between a grantor and the grantor’s trust for income tax purposes. This proposal will not be retroactive to transactions which occur before passage of the 2023 Budget. Under no circumstances should planning of this nature be delayed to the end of the year. Hastily structuring installment sales into grantor trusts is not prudent.

This article briefly touches on some of the provisions of the 2023 Budget and the fallout for companies and wealthy individuals, but it should spur some concern to plan now and not wait for the end of the year to see how things are going to settle. We are already in the second quarter of the year and it is not advisable to wait to the fourth quarter to start planning so we are left with five months to start and finish a comprehensive strategy to deal with the 2023 Budget. Provisions will obviously change but there will be a budget and the attack on companies and wealthy individuals will be a source of revenue funding.

The Inland Empire Business Journal (IEBJ) is the official business news publication of Southern California’s Inland Empire region - covering San Bernardino & Riverside Counties.

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Saybridge Technologies’ Board of Directors Announces Byron J. Paul as CEO



The SyBridge Technologies’ Board of Directors is pleased to announce that Byron J. Paul has joined SyBridge Technologies (“SyBridge” or the “Company”) as Chief Executive Officer and will also serve as a member of the Board of Directors.  Mr. Paul will build upon the Company’s strategic vision of becoming a global technological leader in value-added design and manufacturing solutions ranging from design and prototyping to production-as-a-service and aftermarket services for customers.  Mr. Paul brings extensive experience in industrial technology and a 20+ year track record of driving profitable growth in complex, global enterprises.

Mr. Paul was most recently Group President at Signode Industrial Group where he led a global portfolio of businesses focused on end-of-line packaging technologies and warehouse automation solutions.  He previously served as President of Destaco, a leading designer and manufacturer of precision engineered components for industrial automation and robotics applications. Mr. Paul has also held senior leadership roles at John Crane, a leader in rotating equipment solutions, and at the Boston Consulting Group.  Mr. Paul holds an MBA from the Kellogg School of Management at Northwestern University and a Master of Public Administration from Harvard University’s Kennedy School of Government. He also attended the University of Western Australia where he earned a Bachelor of Commerce with first class honors in accounting and finance.

Mr. Paul stated, “I am thrilled to be joining a world-class team at SyBridge Technologies. They have done an outstanding job expanding SyBridge Technologies’ global reach, growing from three sites in 2019 to 16 locations today. I look forward to partnering with the Board and Crestview Partners as we embark on the next phase of growth to build an unrivaled leader in digital manufacturing.”

Jason Luo, Chairman of SyBridge Technologies and Crestview Operating Executive noted, “Byron is a committed leader with a proven track record of successfully growing businesses and we are excited to partner with him as we plan to execute on the Company’s next chapter of growth.”

Mr. Paul succeeds Tony Nardone who has departed the company to pursue other interests. “We appreciate the many contributions Tony has made to SyBridge and wish him well in his future endeavors,” said Mr. Luo.

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Tips on Accessing Capital as an Under-resourced Small Business Owner



Interview with Peter E. Jackson, MBA, Vice President, Sr. Business Consultant at J.P. Morgan Chase

By Josaline Cuesta, California Program Director, Small Business Majority

Entrepreneurship is essential to a thriving and equitable economy. Yet, too many of our smallest businesses—especially those owned by people of color, women, rural business owners, and other under-resourced communities—face significant hurdles in accessing capital from banks and other traditional financial institutions.

Small Business Majority prides itself on partnering with experts in the field to mitigate the unnecessary impacts of inequitable access to capital and help to break down systematic barriers.

Peter E. Jackson, MBA is Vice President, Sr. Business Consultant at J.P. Morgan Chase. His work in California has been integral to creating pathways for minority and women entrepreneurs to access capital successfully. I sat down with Peter for a Q&A to discuss his experiences, share his expertise and tips, and learn more about expanded opportunities for capital in a unique community.

Do you believe there is a barrier to accessing responsible capital for small business owners? If yes, do you believe that a certain group of small business owners are more susceptible to experiencing challenges? Why?

From where I sit, one of the biggest hurdles facing minority small businesses is access to financial education. Many Black and Latino business owners we work with through the Chase mentorship program, believe it or not, cite access to education as their top need, e.g., understanding working capital, credit readiness, financial planning, managing debt and cash flow, etc. Working knowledge of these principles is the foundation of building a small business. That means having your bookkeeping and financial operations to help you make your best case when seeking funding/capital from any lender. Not having this in order may delay any financing for your business. There are also questions to ask yourself, e.g. ‘Am I in a healthy financial position to pay back a loan or is a bank loan the right financing option for my business needs at this time?’ This is where a banking relationship or banker can come in handy.

Often, minority entrepreneurs may not have had the best relationship with a bank or may not have had a parent or close individual to seek guidance from related to entrepreneurship – the list goes on. The pandemic exacerbated many of the underlying racial disparities that already existed in the U.S., including the banking system. As a firm, we recognize these challenges and do everything we can to address them.

In 2020, JPMorgan Chase announced a $30 billion racial equity commitment to create an inclusive economic recovery and help Black and Latino small businesses, families, and local communities create and sustain generational wealth. We’re creating the infrastructure to help more minority-owned businesses grow and recover through new programs, products, and hiring. This service is free, and business owners do not have to be Chase customers to receive coaching and mentorship.

Information about the JP Morgan Chase Minority Owned – Business Program is available at:

What stories have you heard about the ease of accessing capital for small business owners? Can you please share a few typical challenges and some success stories? Did any success stories involve innovation? Did owners have to think outside the box to gain continued access to capital?

Yes, thinking out of the box is an everyday part of what we as Sr. Business Consultants do. Every business owner comes from a different place financially and operates their business differently. An example of this was a local smoothie bar owned by a Latina entrepreneur in Fontana, California. I discussed her goals and challenges, and she needed to obtain a small working capital loan to hire a part-time employee to extend her business hours and add signage. I helped her calculate and understand her break-even to determine the right price she needed to charge for her product to be able to pay for an additional employee and add a sign to the front of her store. This was important because she established new sales goals to drive more revenue. Also, the loan underwriter could see her business now had sufficient income capacity to borrow and pay back a loan by charging enough to support the loan payment. Business owners often borrow without a plan to demonstrate they can repay the loan or without consulting their CPA to ensure they leave enough money in their business to borrow. Part of my role is to help small business owners understand their business finances and how to leverage them to scale and grow their businesses.

What are some ways to increase small business funding to expand access to capital?

From JPMorgan Chase’s standpoint, here’s what we are doing to expand access to capital for underrepresented communities. We have committed $396 million (page 23-25) in small business philanthropy to grow Black, Hispanic and women-owned small businesses and create a more inclusive recovery from the COVID-19 pandemic, including:

  • ~$42.5 million to expand the Entrepreneurs of Color Fund (EOCF) in more U.S. cities, the program will offer low-cost loans and technical assistance to small businesses through LISC and CFDI network
  • Philanthropic investments to build the capacity of diverse-led nonprofits across the globe and support the signature Ascend Program
  • Policy solutions through the JPMorgan Chase Policy Center to improve U.S. Small Business Administration (SBA) program to better meet the needs of minority- and women-owned small businesses.

Within Business Banking, we plan to provide an additional 15,000 loans -totaling $2 billion- to small businesses in majority-Black, -Hispanic and Latino communities over the next five years. To further expand access to credit to minority business owners, we’re:

  • Exploring targeted adjustments to how the firm evaluates credit applications
  • Introducing new products, including a digital lending platform, to better support the needs of small Black, Hispanic and Latino-owned businesses seeking quick access to capital.

What are some of your recommended, trusted community resources or training opportunities within the Inland Empire that will help with understanding ways to access legitimate capital?

  • Mentorship, dedicated coaching, and education are critical to helping people get credit ready. Look into Chase’s 1:1 coaching for minority entrepreneurs across 21 U.S. cities, where they work with a senior business consultant to help them scale. Visit to learn more.
  • Visit the Inland Empire Center for Entrepreneurship (IECE), an SBDC program within California State University, San Bernardino, which delivers a wide range of programs, technical assistance, and services to existing small business owners or aspiring entrepreneurs in the community. Every state has a small business development center offered through U.S. SBA and colleges/universities.
  • Lastly, I think AmPac, UCR, and the University of La Verne also have some of the strongest community resources that speak to access to capital, readiness, training, grant programs, microfinancing, etc.

Peter will join other financial experts for a Small Business Majority hosted event on September 14, 5:30pm PT. “Breaking Barriers: Accessing capital as women business owners of color” is a free event to learn tips for remaining resilient in business and how to navigate non-predatory debt financing options that will help grow or strengthen your woman-owned small business to help build generational wealth.

Register for this event here:

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Stater Bros. Markets Appoints Rebecca Calvin to Senior Vice President and Chief Marketing Officer



Stater Bros. Markets is pleased to announce the appointment of Rebecca Calvin to the role of Senior Vice President and Chief Marketing Officer, due to the upcoming retirement of the company’s well-respected and current Executive Vice President and Chief Marketing Officer Dennis McIntyre. She will report to Chief Executive Officer Pete Van Helden and serve on the company’s Executive Leadership Team. She will begin her new role on Monday, September 26, 2022.

Calvin will lead the company’s marketing efforts which include the Sales and Merchandising, Integrated Marketing, eCommerce, and Food Strategy and Innovation departments. She will be responsible for strengthening Stater Bros.’ ability to meet the evolving needs of grocery shoppers in the diverse Southern California market through smart and effective product, pricing, and promotion strategies.

“I am very excited that Rebecca has chosen to join the Stater Bros. team and I look forward to working side-by-side with her to make Stater Bros. the premier shopping destination for groceries in Southern California,” said Stater Bros. CEO Pete Van Helden. “On behalf of all our teammates, I would also like to take this opportunity to thank Dennis for nearly 45 years of dedicated service to our company. His passion and enthusiasm have made a significant impact on the current and future success of Stater Bros.”

Calvin arrives at Stater Bros. with several years of experience in the grocery industry, most recently serving as Senior Vice President and Chief Merchandising Officer at The Save Mart Companies, where she led merchandising, space planning, pricing and promotion execution, and their private label program. Before joining The Save Mart Companies, she began her career in the grocery industry with Daymon Worldwide as a category buyer. She served as Vice President of Grocery, Frozen, and Dairy at Mariano’s before continuing on to merchandising and category management roles in the Kroger family of companies.

Calvin graduated from the University of Wisconsin-Oshkosh with a Bachelor of Science Degree in Biology with a Minor in Business Administration and is a graduate of the Cornell University Food Executive Program. She has earned a Six Sigma Green Belt Certification and currently serves on the Western Association of Food Chains (WAFC) Board of Directors. Earlier this year, Calvin was recognized as one of Retail Today’s “50 Outstanding Women in Retail.”

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