California’s ultra-wealthy are scrambling to prepare for a possible billionaire tax, including by considering upping their charitable donations in order to lower their taxable worth, The Wall Street Journal recently reported.
Under the proposed tax, those with a net worth of $1.1 billion or higher at the end of the year would be charged a one-time 5 percent tax, with lower-value billionaires paying lower tax rates, according to the newspaper.
Tax-and-estate adviser Andrew Katzenstein told the Journal that a real-estate investor client of his is considering speeding up his family’s charitable-giving plans on the grounds that he would rather the money go to charities he and his wife support than to the state government.
Tax attorney Jon Feldhammer is working with a client who was an early employee at an AI company and has shares that vest at around $300 million this year, according to the Journal, which reported Feldhammer is attempting to negotiate with the company to allow the unvested shares to go to charity.
Other tax workarounds advisers are suggesting include investing in a vacation home or high-value assets such as art or yachts that are located out of the state, where they would not be included as part of the buyer’s net worth under the tax, the newspaper reported.
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