Taxation & Estate Planning

Estate Tax Red Herring #2

By Christopher L. Miller

The next anti-estate tax argument that you may hear is that the estate tax taxes assets that have been taxed already. While this may be true in some instances, it is false when appreciated assets are considered.

To understand this requires attention to the interplay between income taxes and estate taxes. As usual, an example would be best.

 Assume “A” purchased a home in 1965 for a total purchase price of 100k. “A” passes away in 2009 and that house is now worth 4 million.  In this example “A’s” tax basis is 100k and “A” had a taxable gain of 3.9 million dollars that has never been subject to income tax. Under 2009 estate tax law, there will (more…)

Full post as published by Res Publicae - The New York Estates Blog on December 22, 2009 (boomark / email).