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They could... charge the cap gains tax to the estate, getting rid of a big point of the strategy? The estate not having to pay cap gains on their gains is the
by novok 5y ago
They could... charge the cap gains tax to the estate, getting rid of a big point of the strategy? The estate not having to pay cap gains on their gains is the big kicker and essentially arbitrary. If the person 1 month before they died sold a bunch of wealth to settle all of their debts, they would pay cap gains tax. But after their death, you do the same thing with their estate and they dont pay cap gains tax from gains before their death? It's a bit absurd.
- fighterpilot 5y agoThey should not charge cap gains on the estate, since that'll force sales of illiquid assets which is not good. They just have to not allow the resetting of the cost basis of the assets. It's a very simple fix.
- novok 5y agoI was more implying when the estate sells something, you charge the original basis of cap gains tax when they try to pay off its debts by liquidating, but illiquid forced asset sale issue is also a good point.