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Yeah so the ultimate source of the problem seems to be the basis step up, not any of the rest. So why isn't that identified as the source of the problem? I sup
by dataflow 4y ago
Yeah so the ultimate source of the problem seems to be the basis step up, not any of the rest. So why isn't that identified as the source of the problem?
I suppose one thing nobody has mentioned is that deferral can also help you wait for a year when the rate of the top tax bracket is lowered? Maybe that's a significant component too?
- heleninboodler 4y agoI think it's possible that eliminating the basis step up could change a lot of incentives to do this sort of maneuver, yes. For folks this wealthy, I doubt the difference in tax brackets make much of a difference. What's classified as income is probably such a small portion of what they get taxed on that it just doesn't matter.
- dataflow 4y agoSorry, to clarify, I meant the rate of the top tax bracket. Not the threshold. I edited the comment to clarify.
- heleninboodler 4y agoStill, if you make $10MM/year in cap gains and what qualifies as "income" is in the hundreds of thousands, do you care what the top rate is?
- dataflow 4y agoDepends what kind of capital gains you have. I have no idea what they have, but short-term capital gains are treated as ordinary income. And obviously the logic would be the same for if/when they change the long-term capital gains tax rates.