Possible future elimination of step up basis

[CardsFan]

Poppycock. Possibly interesting theory, but that is all it will ever be.

Poppycock? My Grandfather would use that term. I guess that means we are all getting older.

In all seriousness, I agree with you in principle, And your idea that the heirs get the normal CG exclusion for a house makes sense.

The issue is, millions of people have planned their estates for the current tax code. Yeah, I know they can change it at any time, but this is a big one.

 

[6miths]

The stepped-up basis has always been a very odd part of the tax code. I can clearly see a stepped-up basis for inherited assets where the decedent's estate has paid estate taxes in that they have paid the tax and therefore get the stepped up basis. But for situations where there is no estate tax paid it seems like an unjustifiable freebie to heirs to me.

+1

It always seemed to me that this was the rich getting richer in a rather artificial and unfair way. What is the rationale that expected capital gains taxes should not be paid on an asset as they would at any other time. If one wanted to carry the original ACB forward until the sale by heirs that would seem reasonable but to wipe out the tax liability? Not so reasonable.

My understanding was that one of the things that the founding fathers wanted to avoid was to have large amounts of money concentrated in relatively small numbers of families - a new aristocracy. This seems like one of those measures that will lead to just this. It seems to me that the average middle class person benefits very little (and the poor suffer) from this bit of tax code the rich are making a killing on it. Do the rich need this tax break? Of course I may have it totally wrong.

 

[youbet]

Poppycock? My Grandfather would use that term. I guess that means we are all getting older.

No, not really. It means pb4uski is getting older.

 

[pb4uski]

Hey... I'm not even 65 yet.... but its hard not to concede to getting older.

 

[youbet]

Hey... I'm not even 65 yet.... but its hard not to conced to getting older.

64 going on 85!

 

[pb4uski]

Thanks a bunch!

 

[triangle]

It would create the problem of holding the heir responsible for knowing and calculating basis. Should an heir be legally bound and punished (tax penalties) if later determined they received bad information from the now deceased?