Comments on: Estate Tax Repeal, Take Two

By: Kelly

Kelly — Fri, 27 Aug 2010 12:28:37 +0000

Kris, you’re right about the lack of stepped-up basis being a headache. There are actually a couple pieces on the site about it. Here’s a quick and dirty explanation of basis: http://www.taxgirl.com/what-the-heck-is-basis-anyway/
I’m not sure about your mom’s situation but remember that there’s an exemption available for estate-related capital gains in 2010.

By: Kris

Kris — Fri, 27 Aug 2010 07:11:18 +0000

What this article , and subsequent comments seems to overlook is that the estate tax was not entirely eliminated for 2010. Instead of a simple tax on the total value of the estate, most of which has not been previously taxed as it represents capital gains in most estates, it reinstates capital gains taxes on all those gains, which must be calculated form years, or decades ago along with additonal investments, etc . These taxes will be due when the asset is sold, perhaps not for genterations in the case of family homesteads or businesses. At that time it will be the duty of the current owner to document the cost basis of these assets; As someone who would have trouble finding the paperwork to document gains on relatively short term investments, without the assistance of my investment adviser’s computer, I cannot imagine digging through boxes of paperwork from long dead relatives and h0ping the documents still even exist. (actually I can , my mother passed away in February. 57 years worth of checks, stubs, copies, invoices ,etc. to sort . And more yet to come. )

By: Bill

Bill — Tue, 01 Dec 2009 18:42:34 +0000

I must be missing something. Maybe it’s my demented thought process. When this law was enacted, I was amazed our tax system had degraded to the point that we may need tax planning on which year is best for “pulling the plug”. Does this seem to be over the top? I’ve seen little discussion on this; probably because this was supposed to change before the end of 2010. However, it hasn’t so far. Suppose it doesn’t change. If I had a taxable estate, was in poor health, and cared how much more I could leave to my loved ones by passing in 2010 instead of waiting, the timing of my death for tax purposes just might become a critical part of my estate plan. Conversely, suppose the heirs of a large estate foresee the millions that would evaporate if death occurred after 2010. Could this foster some interesting “whodunits”? Is that sick? Perhaps; but isn’t it just as sick to enact tax laws that can make those scenarios possible? Congress really needs to fix this!