It is taxed. That’s what the estate tax does. It taxes the transfer of assets at death. |
Not for estates less than $11 million (or $22 million for a couple). Also the step up in basis on capital gains on death lets possibly huge sums of capital gains go untaxed. I have to pay capital gains on my investments? Why do heirs and heiresses get a tax break? |
So you’re saying that we should replace the estate tax with a carryover basis? I’d be fine with that. |
No, I don't support that. How about we just tax estates like all other income/investments? No step up in basis on death on capital gains. Apply current tax rates. Simple. Fair. |
And force the estate into liquidation? Dumb. |
Simple and fair is dumb? |
People who divorce often have to liquidate some of their assets. Why do heirs and heiresses get an exception? |
Well if we treated estates like other income there would be a step up. When I buy a stock, my basis is my purchase price not the purchase price of the seller. As I understand you, you want an inheritance to be treated as income to the heir. So the heir would pay income tax on the value when inherited, and if later sold would pay income tax on any increase in value from the time he inherited to the time he sold. Your proposal would probably be a net tax decrease for gigantic estates and would definitely be a tax increase for small estates. |
They did pay back society in taxes and likely job creation. You sound bitter and insane. You also might want to read some reasonably sound books on economics. ![]() |
Both my grandmothers spent a long time in nursing homes so my parents have long-term care insurance plus large savings. My dad just died at home. He never had to go to a nursing home and his only hospital stay was less than a week about 2 months ago. My mom is in reasonably good health and going to live with my sister so, hopefully, can live at home a long time. So, we're likely to end up with a significant inheritance but it was also possible, given family history, that one or both could have had Alzheimer's and expensive long term care, even beyond what their insurance would cover. |
Fewer than 1 in 20 inherit $500k .... that’s not much imo. |
Dead parents aren't selling their stock to their children. They are giving it. The basis of the stock is the purchase price. It doesn't make sense to step up the basis on death. It's a giveaway to heirs and heiresses. I think capital gains should be taxed the same for all. No capital gains tax breaks for heirs and heiresses. Yep, I'm in favor of a flatter estate tax, even if that is a benefit to huge estates. I suspect most huge estates avoid most of these taxes anyway through careful planning. Only about 1000 estates reach the estate tax exemption each year. I would bet many, many more pass on millions under the threshold. If you have any data, please share. |
How about we don't base our tax code on "likely."? I would support some type of tax credit for job creation. But that doesn't exist now. So no tax breaks for "likely job creation." |
This is all so dependent on the family situation.
Barring unforeseen massive medical expenses (which certainly could happen), my sister and I are set to inherit a couple million dollars each + a fully paid off apartment in a pre-war building in Manhattan. Clearly we are exceptionally privileged. That said, I do think we both have worked hard. My sister is a college professor and I’m a public servant. I don’t think we’ve taken our privilege for granted. My parents did not come from money. My dad grew up middle class on Long Island, but his parents didn’t give him a penny after he turned 14. He was told to just go out and figure out how to make money. He got his first job from a friend who worked at a movie theatre, who was willing to look the other way around the fact that my dad wasn’t 16 yet (things were different in the late 60s). My mom grew up working class in Queens (my grandma was a waitress and my grandpa was a glass blower). My mom was first in her family to go to college. My dad’s dad did go to college, but wouldn’t pay for my dad to go, so my dad got a scholarship. They went to a law school ranked around 100, but graduated on the law review and both got excellent jobs. My mom stopped working when my sister and I were little, and my dad has worked his butt off as a lawyer for the last 40 years. Yes, he’s made a lot of money doing it, but he worked really hard at a job he did not like, to provide for his family. So are my sister and I privileged? For sure. Was there a lot of hard work involved? Absolutely. |
Ok I’m confused about what you’re proposing then. You said you wanted to treat inheritance as income, but you also want a carryover basis, and you also want a flatter estate tax. |