Under the Obama proposal, when you inherit an asset your basis will simply be the decedent's original basis.
This is not the inheritance tax, this is a capital gains increase. Using the example cited (and my parents left me a house so this would apply) the capital gain realized upon the sale of an inherited asset is based on the value when it was initially acquired, not when it was transferred at death. So if the market value when the estate was settled is 100K and sold for that amount, but it was purchased for 40K the estate will pay a capital gain on the 60K.
Fortunately even a squish like Boehner isn't going to pass this left wing wet dream.
Sorry, you are wrong, at least partially.
Let’s use two sets of numbers.
First—yours. The capital gain realized by anyone who sells an asset is, as you say, determined by their basis. But, there’s an exemption for the estate which is $5.3 (say 5) million dollars. So, when the estate is settled, the house will be valued (that’s part of the process) at 100k. Since 100k is less than 5 Million, the estate does not have to pay tax. The inheritor (you, I guess) gets the house for a “stepped up” basis of its value when you inherit it... 100k. No one owes any taxes. If it goes to 200K while you own it and then decide to sell, you’d pay capital gains tax on the 100k increase.
Second set—Your parents have $5 million in cash, and a house they bought for 40k, but is worth 100k at death. Since the estate is worth $5.1 million, 40% tax is due on the excess, or 60K, when the estate is settled. It could come from sale of the house, or by dipping into the cash—the government doesn’t care. If you then inherit the house, it’s basis is 100k. If the government resets that basis to 40K (the original price), and the house goes to 200k when you decide to sell, you’d owe capital gains on the difference of 160k. In other words, the exemption didn’t help!
Note: I simplified the exemption amount to 5 million (I think its around 5.3), and I used a single person’s exemption—married couples can pool their basis to double the amount.
I hope this is helpful, and that your parents live forever.