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STEP Act: Replacing stepped up basis

https://www.cnbc.com/2021/03/30/senate-dems-propose-capital-...

Democrats Step Tax proposal for estates replacing current stepped up basis on inherited investments and real estate. $1MM exemption plus existing up to $500K exemption (married) on your home. Tax paid deducted from Federal Estate Tax. 401k and IRAs exempted. After the exemption your estate will pay capital gains taxes on gain in your investment gains. Part of Biden's tax package. First proposal now in print.

Proposal from Sens. Elizabeth Warren, Mass.; Chris Van Hollen, Md.; Cory Booker, N.J..; Sheldon Whitehouse, R.I.; and Bernie Sanders, I-Vt.

Capital gains over $1MM taxed at 39.6%.

Gifts and bequests to charity exempt.

Capital gains on illiquid assets like farms or businesses could be paid in installments over 15 years.

Strange that these ideas originate in the Senate. I thought tax bills are supposed to originate in the House. But I guess the Senators have better access to the news media.

First details of the infrastructure bill are to be revealed at Pittsburgh tomorrow (Wed, Mar 31).

We shall see how these proposals do in Congress. This is part of paying for Biden's infrastructure plans.

Federal Estate Tax not discussed in this one but current $11+MM exemption expected to be reduced to $3.5MM.
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