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.
“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 ...
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!
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.
That’s nothing.
They are going to zero-out your bank accounts and cancel your credit cards soon.
Death camps are the end=game.
Just following Xi Xianping’s orders.
Should have explained that:
“A step-up in basis is the readjustment of the value of an appreciated asset for tax purposes upon inheritance. 1 The higher market value of the asset at the time of inheritance is considered for tax purposes. ... A step-up in basis is applied to the cost basis of property transferred at death.”
What’s the work around then? Add your kids to the deed and make it a Quit Claim? Would that be a protection?
And runaway inflation will soon eat away at our savings, while lowering the government costs for their rampant debt.
Win-win for them. Too bad for the rest of us.
btw - where did all those trillions go, I wonder.... /s
suppose somebody inherits a million-dollar-property with a basis
of 200K but the records of the basis are lost
how much money are we talking about?
"Ronaldo works a booth next to the H&R booth at the mall and he heard Simone tell a customer's aunt ......."
No wonder I visit FR less and less. What, with this and libertarian dopers pushing their agenda.........
First, this isn’t law and would be subject to tax code revision.
Second, the change wouldn’t affect you. It’d affect the beneficiaries of your estate.
Third, capital improvements would be not netted out of the cost basis. If I buy a farm for $1 million and invest $ 1 million in it, my heirs could immediately sell it for $5 million with no tax consequence.
With the contemplated change they’d be subject to a 20% capital gains tax on the $3 million above my outlays, or $600,000.
Bkmk
bump