re: Capital Gains at Death

I'm not really sure where I come down on this.

On the one hand, the current situation of (effectively) no Estate Tax plus a stepped-up basis disincentivizes an older person from making an otherwise beneficial transaction (Where person owns X, thinks Y will be more valuable than X 10 years after his death even after cap gains on X, but holds on to X because he anticipates that at his death X will be worth more than [Y less Cap Gains on selling X]).

On the other hand, not allowing a step-up basis might keep property in the same family basically forever, because with each generation the tax hit from selling gets bigger and bigger.