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Penalty rates: The proposed capital gains rate over that max of $1MM is over 40%. That's quite a penalty in my view.

Stepped up basis meant that your accumulated gains could be passed on to your heirs tax free. Their cost basis was market value on your date of death. Many of us have accumulated capital gains with this tax loop hole in mind.

Yes, there is also a proposal to reduce the estate tax exemption, which at one time was $600K. In 2025 the old law takes it to $3MM as I recall from the current $11+MM.

The one plus is that the capital gains taxes paid by the estate are deductible from estate taxes in at least one proposal.

But who know what part of this will make it through Congress.
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