I’m glad you’re not in favor of the inheritance tax. Just keep in mind that when it hits people who WANT to keep running the company (like Zacky Farms here in Fresno), the kids may be forced into selling to pay the taxes, and guess who’s waiting to buy up the assets at fire sale prices?
There are ways to avoid inheritance tax. There is enough equity in the inheritance to borrow to pay it if they choose to pay it. This is just an excuse to sell the the business that most kids don’t want to run anyway. The tax is not the WHOLE inheritance. With the inheritance basis increased, they certainly have a BIG depreciation deduction to offset income tax. Some farmsteads in Iowa have been depreciated 3 or 4 times.
If there is no inheritance tax then they defer taxes by not selling the business.
In the case you have referred to, state inheritance taxes that are more of a problem than federal. Along with other onerous regulations. If there is a fire sale because the kids CHOSE cash over business and memories, hopefully it is you and I that are buying.