re: Capital Gains at Death

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Well, for starters, it's up to the seller of an asset to show basis, right? In the absence of that, the basis is zero.

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Taxpayers report the basis, and only have to substantiate the claimed basis in the event of examination. Using your scheme the IRS would have to examine every return with a sale of an asset that was not a covered security. Administratively, it would be too burdensome on taxpayers and the IRS to be practical.

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How can cash have a basis that is not equal to FMV? The basis of cash is always $1 for each $1 of cash held.

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What I meant was that the receipt of cash with a deemed zero basis would mean the immediate recognition of income equal to the amount of cash received by the recipient. The recognition of income would then provide basis in the money received similar to gain recognition providing basis for non-cash assets received in a sale or exchange.