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No. of Recommendations: 75
The bigger question is why does the government think it should get a chunk of somebody's estate when they die[*].

Why do you think dead people assets should be treated differently than live people assets?

Here's a very simplified example. Joe has only one asset - BRK stock with a cost basis of $100,000 and a value of $1.1 million. He has just one living relative in his will - his daughter Mary. Joe plans to sell all his BRK stock for a once in a lifetime first class trip around the world.

Scenario A: Joe sells all his stock. Joe enjoys his trip around the world. He owes $200,000 in capital gains tax.

Scenario B: Joe falls down the stairs and dies while on his way to his computer to sell his stock. He owes no tax. Mary inherits $1.1 million and owes no tax.

Why is it that you think Joe, the person who did all the work to earn the $1.1 million, should pay tax while Mary, who did nothing but be fortunate to have Joe as her father, pay nothing if her father dies?

Now if you get rid of the estate tax and eliminate the stepped up basis, Mary would be treated identically to Joe and owe the same amount of tax as Joe would have paid. I don't understand the concept of treating people who inherit money better than the people who earned it.

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