“For generations, assets held at death get a stepped-up basis—to market value—when you die. Small businesses count on this.”
But today a Washington Post reporter says Biden is “personally invested” in killing stepped up basis and imposing new tax
Joe Biden vows to target small businesses and individuals with a new Death Tax: He will eliminate step-up in basis. This will impose a steep tax increase and paperwork nightmare for small businesses, farms, and families. It may also violate his own pledge against raising any tax on any American making less than $400,000.
Washington Post reporter Jeff Stein tweeted Tuesday that “the president is personally invested in addressing the stepped-up basis issue”.
In this video, you can see a sample of the many times Biden has threatened to eliminate step-up in basis.
In a piece titled “This Biden Tax Hike Hike Will Hit Mom & Pop Hard” tax lawyer Robert W. Wood writes:
Under current tax law, assets that pass directly to your heirs get a step-up in basis for income tax purposes. It doesn’t matter if you pay estate tax when you die or not. For generations, assets held at death get a stepped-up basis—to market value—when you die. Small businesses count on this.
Biden’s proposal would tax an asset’s unrealized appreciation at transfer. You mean Junior gets taxed whether or not he sells the business? Essentially, yes. The idea that you could build up your small business and escape death tax and income tax to pass it to your kids is on the chopping block. Biden would levy a tax on unrealized appreciation of assets passed on at death. By taxing the unrealized gain at death, heirs would get hit at the transfer, regardless of whether they sell the asset.
As reported previously by CNBC:
“When someone dies and the asset transfers to an heir, that transfer itself will be a taxable event, and the estate is required to pay taxes on the gains as if they sold the asset,” said Howard Gleckman, senior fellow in the Urban-Brookings Tax Policy Center.
In its analysis of Biden’s tax plan, Tax Policy Center says the step-up in basis proposal mirrors a proposal described in an Obama-Biden 2016 Treasury Department document. This document confirms that Biden will force a capital gains tax payment immediately upon transfer of an asset after death of a loved one:
Under the proposal, transfers of appreciated property generally would be treated as a sale of the property. The donor or deceased owner of an appreciated asset would realize a capital gain at the time the asset is given or bequeathed to another.
The amount of the gain realized would be the excess of the asset’s fair market value on the date of the transfer over the donor’s basis in that asset. That gain would be taxable income to the donor in the year the transfer was made, and to the decedent either on the final individual return or on a separate capital gains return.
On top of all that, Biden also vows to impose capital gains tax increases just as America digs out from the pandemic. He said “every single solitary person” will pay capital gains taxes at ordinary income tax rates. He will also double the top rate to 40 percent, highest since Jimmy Carter in 1977.
Click below to see Biden’s vow to eliminate stepped-up basis: