2 ms·
"Buy, Borrow, Die" is the talking point. Cost basis of the assets gets stepped up at death so the inheritor can pay off the loans at that point in time without
by loeg 3y ago
"Buy, Borrow, Die" is the talking point. Cost basis of the assets gets stepped up at death so the inheritor can pay off the loans at that point in time without paying taxes on capital gains.
- SkyBelow 3y agoThen this seems to be the loophole that needs to be resolved. Before the estate pays out, the debts should be settled within the estate using the cost basis belong to the deceased. Assets paid out after loans are satisfied should then have their cost basis reset (if that happens at all, I don't want to take a stance either way if that should happen, except it should only apply once loans are repaid if it ever does apply).
- loeg 3y agoMechanically, I don't think that works. What prevents the debt from attaching to the inheritor before death (e.g., co-signed loan)? The only solution here is eliminating the cost basis step-up at death.