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Elimination of the step-up in basis at death would be an administrative nightmare for taxpayers. How many have all of the records needed to establish basis in all of their assets that their heirs can easily access and make sense of after they've died?
If you're not able to provide evidence of basis, then your basis is $0 and you get taxed on gross proceeds from the sale of an asset.
Big win for the government and a provision certain to put the IRS and taxpayers in battles for years to come.
Yes, it would. By the time my dad died in 2014, my mother had dementia. My sister and I had to handle everything. We were both working full-time, too. My dad had box after box of financial records. They even had a box of Christmas cards and Thank You cards that had been sent to them. We could not find owner's manuals for the appliances, however. I could not begin to go through the financial records at the time. Also, what financial information dad had supplied to us years ago was out of date. My sister had known that but was afraid to bring up the subject. In our family, you had a better chance of talking about sex than finances.
In addition to a brokerage account, my dad also owned stocks directly from a few companies. Moving everything to his brokerage account was not easy. He had a dividend reinvestment plan for a couple of his stocks; good luck figuring out the basis on that. I refused to sell those stocks until mom died; avoiding the problem of basis value.
As far as taxing an estate at the original basis, this brings up the fundamental question of what should the government encourage as far as citizen behavior. Should the government encourage citizens to save and invest so that their children can have a better life, or should there be punitive estate taxes? In a country with punitive estate taxes, you might just as well spend your savings on hookers and blow. It's bad enough that I constantly see ads for the state lottery.
That's about the same income that triggers the supplemental Medicare monthly premium (income-related monthly adjustment amounts (IRMAA) ).
In 2020, individual seniors with a modified AGI of more than $87,000 pay an extra $57.80 per month for Medicare Part B. That's a total monthly premium of $144.60.
30 years ago, people were saying the same thing and here we are today. I bet 10 years from now, debt will be much higher and we will keep chugging along, business as usual.
Exactly.
What people don't realize is that national debt equals the money supply. There is no question of paying it off.
The question is the efficiency of the money supply.
To be sure, there are big problems there.
But tinkering around the edges with this quaint notion of taxes from the early 1900s, in the age of railroads and on the cusp of automobiles, in the 2000s in the age of instant information and telecommunications and on the cusp of other groundbreaking technologies is laughable at best.
And that's exactly what it is, laughable political theater.
Elimination of the step-up in basis at death would be an administrative nightmare for taxpayers. How many have all of the records needed to establish basis in all of their assets that their heirs can easily access and make sense of after they've died?
If you're not able to provide evidence of basis, then your basis is $0 and you get taxed on gross proceeds from the sale of an asset.
Big win for the government and a provision certain to put the IRS and taxpayers in battles for years to come.
Poor record keeping isn't a government's problem per se. Maybe for oldest of seniors and a few others keeping track of when they bought something and at what price *might* be an issue; but with modern technology it certainly doesn't have to be that way today.
Poor record keeping isn't a government's problem per se. Maybe for oldest of seniors and a few others keeping track of when they bought something and at what price *might* be an issue; but with modern technology it certainly doesn't have to be that way today.
Not sure what you're gleaning out of this article but looks like it agrees with what I said. From the conclusion:
"Eliminating step-up in basis would also increase the compliance burden for heirs, who would have to verify the original cost basis of property upon a decedent’s death."
And the need for record keeping, poor or otherwise, is a government problem. The government is the architect of our voluntary compliance system. Increasing the cost or complexity of compliance reduces compliance.
Modern technology is irrelevant when it comes to tracking basis. It may help with covered securities in the stock market, but there are a whole host of assets that don't fall under this regime.
Well, I'm far from wealthy, and we pay more in taxes under Trump's plan than before it was implemented. Limiting things like deductions for property taxes and mortgage interest really screwed us.
Hey, but glad to see Trump only paid $750!
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