re: I don't understand inheritance tax

quote:

---

What I would like to see is that when someone dies if he leaves the estate to his direct heirs, they assume the deceased person's cost basis and only would pay capital gains tax whenever they sell they assets just as if the dead person had sold the assets while alive.

---

ETA: I completely misread your post. I thought you were advocating for a step-up in cost basis for everyone and elimination of the inheritance tax. That would be illogical.

You're much more likely to see the opposite happen, and I'm not sure there is really anything wrong with that.

I'm not a huge fan of the step-up in cost basis from a logical standpoint - why should your grandfather owe long-term capital gains on $3M in profit in Exxon Mobil stock the day before he dies, yet you, as an heir, owe nothing in LTCG the day after he dies?

I know advocating for taxes is risky business on the OT, but if you're going to have them, that seems much more logical than the cost basis step up. I understand it may not be as practical since older record keeping may be lacking, but going forward it shouldn't be an issue with new generations.