Posted 6/30/2020 19:57 (#8346108 - in reply to #8345632) Subject: RE: I guess stepped up basis is considered a loophole
I am only looking to capture the capital gains tax that is currently being forgiven. I think the estate should pay capital gains due on asset transfer and pay no estate tax. Or, if current system is retained and estate tax paid ($0 in 99.8% of estates) the new asset owners should inherit the current basis as well. I certainly did not mean " Owe ordinary rates on the first dollar inherited". Lets be clear capital gains taxes should be paid on capital gains not current value, death unfortunately is quite often the triggering event.
Currently a couple can pass on 10.6 million (5.3 / individual) estate tax free. Assuming that is all capital gains that is tax avoidance of somewhere north of 2 million. Somebodies got there hands in someones pockets already. Ideally if a couple sold there business to finance a lavish retirement versus a couple dying from a capsized boat on a Minnesota lake, the resulting tax would be the same.
The estate value is vastly different from the capital gains in the estate. I think it is possible to have a 10 million dollar plus estate with 0 or little capital gains.
Taxes are necessary to live in a civilized society. Tax avoidance, tax shelters mean someone else must pay for you. State and local tax breaks to create jobs is an example.