| IowaGuy - 6/30/2020 10:51
Consider this. I bought land for 2000/acre which is now worth about 10,000/acre. Yes there is a gain of 8000, but only if it is sold. Then when I pass and leave it to my son he doesn't sell it. No gain is realized in dollars, only a number on the balance sheet. With out stepped up basis he could owe perhaps 20% on the 8000/acre gain or 1600 per acre. That's just wrong for an asset that only cost 2000 to begin with. Yes the exemption allowance will cover some of this if not lowered, but those really wealthy individuals will find ways around the tax anyway. You really think Biden would fork over 20% of his net worth? Biden also wants to do away with cap gains, so his potential tax bracket will then reach as high as 39.6%, Biden’s new proposed individual top bracket. Corp taxes will go to 28% top bracket, so yes, their will be considerable advantages to forming a Corp to lower the bracket vs personal tax. Combined with state tax, he could owe as much as 50% on the top money on the gains, which when dealing with land values, a large portion could be thrown in the highest brackets. So you are correct, only it’s even worse than the numbers you used.
Edited by Boone & Crockett 6/30/2020 14:41
|
I guess stepped up basis is considered a loophole
