Why you should love the estate tax

Just say “NO” to estate tax repeal.  Most of us will not pay it anyway and you could lose a large benefit that you have today (keep reading).  Current law is set to sunset after 2025 which means Congress will likely not enact legislation until that date approaches.

A limited few facts about the estate tax:

  • In 2019, you owe zero estate tax if your estate is under $11.4 million, or $22.8 million if married (and it’s indexed for inflation thru 2025).
  • Only 1 in 1,000 estates are higher than that.
  • When you inherit property (other than retirement accounts not discussed here) your tax basis, or cost basis, is the value of the property at date of death.

Think about that last point.  If your parents leave you a million dollars you can sell anything you don’t want and you are left with a million dollars tax free.  Let’s say those assets had been purchased for only $500,000 and the estate tax is repealed.  A sale of everything would create a $500,000 capital gain and a $100,000 tax.  This affects everyone who gets an inheritance today, some more than others, but it is a big benefit.

 Just say “NO” to estate tax repeal. 

 It also is a huge incentive for billionaires to be charitable.