Capital gains tax is due when Farm is sold

Posted on: March 24, 2021 at 10:48:51 CT

Eliminating the step up in basis means the tax basis of the inherited farm will be the same as it was immediately prior to the death of the deceased. No tax would be due until the heirs sell the farm.

I am confused as to how eliminating the step up in basis would cause the acceleration of the sale of many farms. If anything it seems it would incentivize the heirs to delay selling the farm.

I have personally benefited from a step up in basis twice after inhereiting property from relatives. I think it is a good policy for most people. But it is silly to provide that tax break to billionaires who have a lot of unrealized capital gains. For one thing it leads to huge dynastic wealth, which is bad for democracy.

Edited by Knucklehead at 10:54:12 on 03/24/21