Will the "Stepped Up Basis" rule be eliminated in the US federal tax code before 2035?
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This questions resolves to "Yes" if, before 2035, an asset that is part of an inheritance will be taxed at its original basis rather than getting a "stepped up basis" to a new basis value when the asset is transferred.

An example:

  • Dad has $1M in stocks that he bought for $100K

  • Dad dies. We love you Dad.

  • Kid inherits Dads stocks and then sells the stocks for $1M.

Today, Kid would not owe any capital gains taxes, as the basis will have "reset" to $1M upon the transfer.

But if the stepped up basis is eliminated, then Kid would need to pay capital gains tax on $900K difference between the sale price and the original basis.

More context: https://en.wikipedia.org/wiki/Stepped-up_basis

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