4 ms·
When I first read about the reset (step-up) in basis after death, I couldn't believe this was the law. Why should inheriting a property reset the basis? What
by profsummergig 2y ago
When I first read about the reset (step-up) in basis after death, I couldn't believe this was the law.
Why should inheriting a property reset the basis?
What a ridiculous notion. Someone's already getting an asset for free (inheriting it), and we're further subsidizing the tax liability on it. Taxes that were due to the government are wiped out.
- hbrn 2y agoAFAIK inflation is one of the reasons. If an asset was worth $50k in 1950, and is now worth $100k, it would feel really weird when capital gains tax is collected on an asset that actually lost more than 80% of it's value over the years.
- wmf 2y agoIf an asset is appreciating slower than inflation, that's on you. You should have sold it and put the money in something better.
- hbrn 2y agoFirst of all, this is a really dumb point. If it is so easy to find good assets, why don't you buy those, take the loan against those like the reddit post suggests, then buy even more assets with those money, take another loan, and just keep doing that to generate infinite amount of money? The only reason stopping you is admitting that every asset carries a risk. But whether it's on you or not is beyond the point. Being taxed on top of a loss is not a good thing. Also there are plenty of reasons not to sell a depreciating asset. For example, CEO willing to maintain control over company, or simply not wanting to send bad signals to the public by selling their shares (because that would depreciate the asset even more). A better argument would be to adjust basis for inflation instead of resetting it.