Reply to Vox article on inheritance

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote]As the very kind tax professional told me, this is what happens when people are working with incomplete knowledge. Complete knowledge, it turns out, is incredibly important when you’re dealing with the tax code.

Meanwhile, incomplete knowledge is kind of the human condition. Tax professionals cost money, which can be prohibitive for many people, especially those who’ve received a windfall but worry they’re about to be staring down some enormous bills.[/quote]

Both parties, but especially Republicans, have made the tax code more complex.

Complexity advantages the rich, who have money to hire advisors.

Simplify the tax code.  Raise the estate tax.  No one deserves to be born with a silver spoon in their mouth.  Make the playing field equal.[/quote]

People whose parents were prudent with money dont “deserve” it but their parents deserve to pass on what they earned and saved and planned for their kids.

[/quote]

Sounds good. But let's update the tax code so that the step up in basis is eliminated.  It's isn't right that people can make millions of dollars and never pay taxes on it. [/quote]

That money has already been taxed at least once, possibly multiple times.[/quote]

It's extremely clear that you don't know what the step up in basis is.  No, that money has never been taxed.[/quote]

You are strident, but not that bright.  Say the asset is stock.  Parent buys stock with salary , which is taxed.  Any dividends accrued on stock while held are taxed,  If heir sells stock, that is also taxed[/quote]

Dividends have nothing to do with it since yes, they are taxed. And if reinvested, the basis for those shares is what they were worth when purchased. Then I inherit the stock. If there are dividends I get taxed. If I reinvest them and eventually sell I am taxed on the gain from when I inherited it (not prior gains) except for what I purchased, which has its own basis.

So, pp was correct, the capital gains have never been taxed. Dividends are not the same.

[b]If they get rid of the step up for inherited assets (has been talked about prior to election), how are they going to figure the 120 acres I got from my mom, who got when my dad died, who got from his dad, who got from his dad, who homesteaded it. What the heck is the basis?[/b]

(Reason my sibs and I got land is we kept mom out of a nursing home through 15 years of decline including loss of ability to walk and several years on dialysis.)[/quote]

This is a good question! And if we eliminated the step up in basis, this would only be a problem once (since moving forward we would know that the value of the property the day you acquired it was your basis). This is a solvable problem. Again, why do I have to pay capital gains on my appreciated assets, but you don't?[/quote]

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