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Biden's stated plan is to eliminate the "step-up" basis for inherited assets.
Now: You inherit a house from your parents that they bought for 100k and it is now worth 400k - that 400k is your cost basis. You sell it for $400k and pay zero capital gains tax.
Biden's plan: You inherit the same house and sell it for $400k - you will get hit with tax on a $300k gain.
Same with stocks or other financial assets. Inheriting and IRA or 401k? It will be worth much less under Biden after taxes.
In other words - govt. taking your money.
EVERY American needs to be paying attention. These are not the actions of a Democrat-they are actions of a Communist.
Biden's stated plan is to eliminate the "step-up" basis for inherited assets.
Now: You inherit a house from your parents that they bought for 100k and it is now worth 400k - that 400k is your cost basis. You sell it for $400k and pay zero capital gains tax.
Biden's plan: You inherit the same house and sell it for $400k - you will get hit with tax on a $300k gain.
Same with stocks or other financial assets. Inheriting and IRA or 401k? It will be worth much less under Biden after taxes.
In other words - govt. taking your money.
Using Biden plan logic that means the taxable value of a home should remain at initial purchase value and these local governments should not be reassessing the value until it is actually sold. Homes should only be taxed and value at time of sale.
In the example the OP gave, the house was purchased for $100,000 and appreciated $300,000 for a value of $400,000. The tax is $300,000, not the $100,000 basis which is not being taxed as income by the heirs. When has that $300,000 been taxed before?
Not the $100,000 that was used to purchase the house to begin with.
Also, capital gain tax rates are typically more favorable than ordinary income tax rates, so the person inheriting the asset and making a windfall of it is being taxed at a lower rate than if they had earned the money by working for it.
Ths is a fundamental flaw in our tax code and is clear evidence of how it favor the wealthy. Earned (hard work) income is taxed at a much higher rate than passive (investment) income. We should look at this generally.
Also, capital gain tax rates are typically more favorable than ordinary income tax rates, so the person inheriting the asset and making a windfall of it is being taxed at a lower rate than if they had earned the money by working for it.
isn't investing "earning the money"?....investing in something that appreciates in value...like a house
In some cases the only inheritance one will leave is their home and maybe some valuable stuff. But no insurance policies, bank accounts etc. The inheritance such a home would have to be sold just to pay taxes on something that wasn't sold.
Doesnt bother those of us who aren't inherited and given everything by their rich parents. Some people have to actually WORK for what they get.
Agreed.. if you are lucky enough to be rich, share the wealth. isn't that what trickle down economics said would happen? Why didn't it happen? Oh, because the rich are greedy mother *****'s
Using Biden plan logic that means the taxable value of a home should remain at initial purchase value and these local governments should not be reassessing the value until it is actually sold. Homes should only be taxed and value at time of sale.
This is not about taxable value for your property taxes. Step ups are solely about what your taxable gains are if you sell. Step ups exist in corporate taxes. Your comment shows a complete lack of understanding of tax codes.
In some cases the only inheritance one will leave is their home and maybe some valuable stuff. But no insurance policies, bank accounts etc. The inheritance such a home would have to be sold just to pay taxes on something that wasn't sold.
No. This tax is only realized if you sell the property.
In the current scenario, if your dad bought a house for $100K and sold it at market value for $500K, he would owe capital gains tax on the $400K difference.
The current code allows him to pass the house to you when he dies at current market value. You get to step up the basis to $500K, and then if you sell, you would owe zero capital gains taxes.
What is being discussed in this thread simply means you would face the same tax burden as your dad if you sell the property.
This disincentivizes you from liquidating property that you inherit.
EVERY American needs to be paying attention. These are not the actions of a Democrat-they are actions of a Communist.
This comment might win the low information award for this thread, but you had a lot of competition.
Help me understand why I deserve a different tax basis on something I inherited than the person I inherited it from has. The only argument I could see someone make is if this property exceeds the $11M inheritance tax threshold. In this scenario, I would expect that property is basis adjusted to avoid double taxation anyway. All other inheritance is being passed 100% tax free.
Biden's stated plan is to eliminate the "step-up" basis for inherited assets.
Now: You inherit a house from your parents that they bought for 100k and it is now worth 400k - that 400k is your cost basis. You sell it for $400k and pay zero capital gains tax.
Biden's plan: You inherit the same house and sell it for $400k - you will get hit with tax on a $300k gain.
Same with stocks or other financial assets. Inheriting and IRA or 401k? It will be worth much less under Biden after taxes.
In other words - govt. taking your money.
Its an administrative nightmare. You often can't tell what the basis of the inherited assets is.
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