Step-Up Basis Loophole

Hmm... wouldn't that just result in people transferring the assets to their heirs before they died?

The family isn't, but the estate of the deceased might be.

What's the hit on passing your estate to your kin BEFORE you die?

Don’t worry, when they die the taxes owed will evaporate through the pernicious step up basis at death rule.

Dead rich people don't own own anything, their heirs do. Keep that in mind.

The step up basis rule applies to the estate and it is stepped up to the current value on the date of death. So the estate settles the debt and pays no capital gains tax on any assets that had to be sold to pay off the debt. Then, the remaining assets go to the heirs. Or, if it is setup like most super wealthy, the assets left in the estate will more or less be cancelled out leaving little in the estate thus avoiding estate tax. Most of the assets will have already been passed along or will rema

That step up is pointless since upon death you pay estate tax which is significantly higher

You die and then you don't have to pay back the loan and any capital gains taxes. The assets are marked to market for tax purposes, then the estate can liquidate them to satisfy the debt and the heirs get the remaining assets and can sell with no tax due.

Because its already been taxed and it was willed or passed down to them?

No, it isn't taken away. The person that owned it is dead.If you decided to give it to your children or whatever, it'll get taxed just like if you tried to give them that much money before you died. If in your will you decide to give it to a non-profit charity instead, it's not taxed.You aren't taxed for dying. The person who died isn't taxed at all. It's the people that are still alive that are now receiving money that are taxed.How is any of this u