|
SE MN | Yes, it's as simple as this.
If you own an asset, you should be able to pass that asset on to WHOEVER you choose with no taxes being due. Whether after death via inheritance or before death via gift. You paid for it, you paid tax on the funds used to purchase it, or you inherited it and someone else paid for it and paid tax on the funds used to purchase it, it is yours to do with as you choose.
As it relates to tax on income. If you are not going to expense that bill for his labor then you are correct, he would not have to pay tax on it as there would be no record of the transaction. But, I am betting that you are unwilling to do that. If you give him a gift he should not have to pay tax on it.
My argument is that the government should not be able to tax assets. If you own it, you own it. As opposed to real property, where you only own it if you continue to pay the government taxes on it. And the vast majority of this country is fine with it as it doesn't really affect them. My position is if we are going to tax one asset, like land, we should tax all assets, like 401k/IRA accounts. It's all about whose ox is being gored. Let the average person in this country feel the pain of taxes on their assets. End payroll withholding. Make everyone write a check to the IRS. The amount of citizens of this country who have no idea with they actually earn or pay in taxes is astounding. That miraculous feat was pulled off when the government started to take the taxes out of your check before you had the chance to have the money, to feel what it was like to have it in cash or in your bank account and then actually send it in to the IRS. If the citizens of this country actually sent in their annual tax bill on 4/15 there would be a revolution.
| |
|
Elimination of stepped up basis
