The proposal to end step up basis by President Obama last month has raised concerns over the unintended consequences that could result from such a move. Some concerns include, heirs of appreciated assets, such as stocks, being subject to potentially large capital gains tax on the inherited property and facing difficulties in keeping transferred businesses going with the added economic pressure. There is also concern over the added complexity to estate planning in general that this change could create. Another concern is that the end of the step up provision will not close “the trust-fund loophole” as stated as the goal of the proposal, but rather push more assets into trusts to avoid capital gains tax.
See Jason Smolen, Is the “Step-Up” Stepping Down?, Wealth Management, Feb. 4, 2015.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
