Posted on 02/20/2021 11:08:31 AM PST by taildragger
Freepers.
Met with my CPA over the innerwebs today. A conservative, 30+ years in the biz.
So they tell me what Team Biden is thinking of doing.
Elimination of the Step Up in Basis, That is mind blowing.
How many of you are keeping running ledgers of Assets and or improvements to hard assets aka real estate etc.? We have been running under the Step Up in Basis rule for some time now.
It gets worse.
You don't or can't come up with a basis? The IRS will assume Zero, that's right, you will pay tax on the full value of the asset.
The only saving grace is the Swamp may not want it to hit their offspring, so this may go nowhere, unless they get an exemption...
My understanding is that the step-up in basis only applies to inheritances or other tax-exempt transfers of ownership — right?
The greed of government knows no end. They want ALL your money, not just some. I hope that sanity prevails and this horrible idea is quashed.
The Democrats love using the tax code for social engineering.
They could easily pick and choose which types of assets (with minute differences between them) qualify and which do not.
This is the reason the tax codes gets bigger and more complicated....
As we say in Texas:
Not just NO,
But
Aw H3LL NO!!
Apples to oranges.
Keeping track of costs for when you sell has nothing to do with step up in basis.
If inheritance you get step up in basis to fmv so no need to keep track of costs.
related article
https://www.nytimes.com/2021/01/15/your-money/estate-tax-biden.html
Biden needs money for all his plans. So taxes will go up.
After eight years of these clowns, they will be taxing your skin color.
Step Up Basis is for inherited property.
Your missing it, they eliminate FMV at time of death and you have to go back to when you deceased relative bought it, it's cost then, and the increase in basis, aka improvements from then on.
“You don’t or can’t come up with a basis? The IRS will assume Zero, that’s right, you will pay tax on the full value of the asset.”
Nothing new ...
But, “Your kids didn’t earn this....”
It is an inheritance tax from dollar 1.
“Your missing it”
He nailed it.
It will destroy whatever is left of the middle class. So if you inherit the house your parents live in for 50 years? You will have to pay the capital gains tax on the increase in value of that home over the fifty year stretch. If you don’t know the cost basis, you have to assume it is zero and pay tax on the whole sale.
Bingo. So now dig threw the paperwork from 1960 if it still exist on the purchase, and then look for all the bills of major improvements if they exist, the porch, new boiler, etc etc etc. What a bleeping nightmare.
The problem with the deceased is not the Wills and Trust, it is the emotions of the declutting and sale etc of their worldly pocessions. It is draining and mindboggling and the only one with the balls to talk about it has been Clark Howard. Been their done that. Now team O'Biden will only add workload to your overworked emotional system, how is that for a pile of suckage...
I assume it is not corrected for inflation... if not, you are actually paying capital gains on inflation itself....
it’s really hard to not hate these people.
Yes, they want ALL your money. They are “allowing” us to keep some of it, but the end goal is to take it all and give it out to specially-privileged people.
This may START with inheritance but once established it will grow. AND remember, this is for on-going spending, not lowering the debt or deficit! Oh, it is also needed to offset SaLT which will return, fully deductible!
Another thing that is very likely to go away is the current Gift/Estate allowance of $11.58 million since that was Evil Orange Man. Reverts (probably) to $5 million. Who gets hurt(?), small business and family farms that cannot afford the tax burden and will have to sell. Who gains? Big Corps that are already ‘D’ donors, acquisition costs are tax-advantaged!
How do you not know the cost basis of a home that’s been inherited? How do you even have the paperwork to document an inheritance if that sort of thing isn’t known? There will be mortgages, a title filed in the applicable hall of records, and any other paper trails that would be used to establish this.
Honestly, I see them seizing 401(k)s before messing with Basis. As you indicated, too many Democrat real-estate barons and just plain crappy landlords in Congress.
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