Republicans’ Mega Gift to Trump’s Richest Appointees

Now, watch where the outrageous part comes in. Under current law, heirs have to pay estate tax based only on the value of the inherited assets on the day the person who bequeathed them died. They don’t have to pay a penny on the assets’ gains while the dearly departed owned them. (The adjustment is known as a “basis step-up” in tax jargon.) But of course, the estate has to pay estate tax of 40 percent of the amount by which the inherited assets exceed the $5.5 million/$11 million threshold. The tax-free basis step-up allows heirs to avoid having to pay both capital gains tax and estate tax on the assets they inherit, which strikes me as a reasonable thing.

However, under the Republican plan’s estate tax repeal, not only would heirs collect everything tax-free, but they would also get a tax-free basis step-up in the assets they inherit. By contrast, when the estate tax was repealed for a year in 2010 as part of the George Bush tax cut bill, the step-up in basis was largely negated, which stopped heirs from getting a mega-windfall.

via Truth Dig Republicans’ Mega Gift to Trump’s Richest Appointees

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