What Tax And Investment Planning Will Look Like Under Trump 2.0

In a recent interview with ThinkAdvisor, a senior financial planner with Kitces.com, Ben Henry-Moreland, laid out the tax planning implications of Donald Trump‘s return to the White House. In short, it’s now almost guaranteed that the 2017 Tax Cuts and Jobs Act (also known as the Trump Tax Cuts) will be extended past its 2025 sunset.

In fact, in his recent confirmation hearing in front of the Senate, President Trump's nominee for Treasury Secretary, Scott Bessent, said extending the 2017 tax cuts is "the single most important economic issue of the day… If we do not fix these tax cuts, if we do not renew and extend, then we will be facing an economic calamity."

The tax bill included the increase in the exclusion for estate, gift, and generation-skipping transfer tax purposes from $5 million to $10 million (indexed to inflation), the increase in the standard deduction, the reworking of the Alternative Minimum Tax, and more.

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In fact, Henry-Moreland even suggests there’s a chance that the Republican majority in Congress could repeal the estate tax completely, a provision that existed in the original version of the 2017 bill. The one big change that might be in the works is a removal of the state and local tax deduction cap, which is now the one unpopular part of the 2017 tax bill among Republicans.

This suggests clients can be reassured that their estate and tax plans from the last few years don’t require major overhauls. The federal picture is likely to remain similar, while few states have flipped enough to create a need to move estates and inheritances to other jurisdictions.

But while a second Trump administration means more of the same for taxes, it is heralding some big changes for investments. For one, President Trump’s nominee for the Securities and Exchange Commission chairmanship, Paul Atkins, looks to be much more crypto-friendly than his famously combative predecessor. Meanwhile, the President’s media company, Trump Media and Technology Group, recently announced a new crypto venture, Truth.Fi.

And just this week, Fed Chairman Jerome Powell said that banks are “perfectly able to serve crypto customers as long as they understand and can manage the risks,” adding that “a greater regulatory apparatus around crypto [from Congress would be] very constructive.” That’s a much more crypto-friendly message than the Fed has historically put out.

The winds in DC are clearly blowing in the favor of cryptocurrencies. Advisors should take note and consider expanding their knowledge about the asset class and offer advice and services for clients interested in the space. To see how one advisor handles crypto, check out our recent interviews with Tyrone Ross Jr. here and here.

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