Message Font: Serif | Sans-Serif
No. of Recommendations: 1
Yes, the taxable estate over the exemption level will result in taxes but the taxes to be paid will be based on the rate in effect during the year in which the person died. My understanding is that the step-up in basis occurs on the date of death. Therefore, in this particular case, assuming the individual died this year, the tax will be 35% of the amount over $5 million.

OK, this was very poorly worded.

What I meant to say is that the estate tax will be charged at a rate of 35% of the taxable estate over $5 million. Due to the step-up in basis of the Berkshire shares at the time of the person's death, any capital gains paid by the estate would only be the difference between the Berkshire shares value at the time of sale ($131K) and on the date of death.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.