Biden capital gains tax proposal
(Wealthy estates may still owe state or federal estate tax on the asset.)
Raising taxes on capital gains means people who earn more than $1 million a year may opt to hold investments longer — and bequeath them to heirs tax-free — as a tax-avoidance strategy.
“Reforms such as eliminating stepped-up basis … would restrict those avoidance opportunities, therefore increasing revenue raised per percentage point of capital gains tax,” according to the analysis, published Friday.
Roughly 0.3% of taxpayers (about 540,000 people) reported income over $1 million in 2018, meaning they’d be subject to the expected tax increase, according to the most recent IRS data.