GV and Thread - OT
I thought some might be interested in the plans for the cuts in estate taxes. According to this morning's WSJ, Bush is said to be considering changing the cost basis date on stocks in an estate, from the current date of death to the purchase date/price of the equity. This is a compromise to get the rest of his estate tax program, which benefits only those that are wealthy, passed.
Assume you bought Intel @ $5. Currently, when you die, your heirs would have a cost basis of the price on the date of your death. If this passes, and you left those Intel shares in your estate, your heirs would inherit the cost basis of $5., and own capital gains on the appreciation when they sell.
Two points:
1. This "compromise" would effectively lower the estate taxes for the very rich, and raise the estate taxes for the middle class and those with modest estates.
2. There would be a disincentive for estate planners to recommend stocks, because of the tax burden to the heirs. Stock's become a less valuable asset with the new tax treatment.
I find this "compromise" onerous, at best. If you agree, you might want to contact your Senator and/or Congressperson. For the Senate, the email addresses are listed at this sight:
lib.umich.edu
Sorry for the OT vent.
John
whoops sorry, this is the correct address for the Senate:
senate.gov |
