Message Font: Serif | Sans-Serif
No. of Recommendations: 0
I just found this post over on the Tax Strategies board. If it's true, maybe things aren't as bad for folks with estates less than $1 million.

Author: criser Number: of 37505
Subject: Re: The cost of H.R. 8 Date: 7/14/00 11:34 PM

I'm trying to stay out of the debate about whether repealing the estate tax is good or not, since I'm an estate planning attorney and no one would believe that I was being honest whichever way I opined...

But I can clear up one apparent misconception.

HR8 does not entirely eliminate the step up in basis at death. It limits it to $1.3 million per person, plus there is a $3 million step-up for assets passing to a surviving spouse.

The way I assume the typical planning will happen is that, e.g., Dad dies in 2010, and would leave $1.3 million to a "basis step-up trust" and leaves the rest to Mom. $3 million worth of the assets passing to Mom gets a stepped-up basis. Mom dies in 2020 and leaves everything to the kids (or to a trust for the kids). $1.3 million of those assets get stepped up. So, plugging in some hypothetical numbers, lets say when Dad dies in 2010, the combined estate is $10 million, split equally between Mom and Dad, which has an overall basis of $5 million, also split equally between Mom and Dad.


Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.