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To: ratan lal who wrote (32425)	9/27/2000 1:54:22 PM
From: Thomas Mercer-Hursh	Read Replies (1) \| Respond to of 54805

2. sale of appreciated stocks. Rather the other way around, if you are talking about passing them in your estate. Appreciated stocks pass to the beneficiary at the appreciated value and neither the estate nor the beneficiary pay taxes on the capital gains up to that point. FWIW, I have seen an article that the bill which was intending to do away with estate taxes would actually have changed this so that the inheritor would inherit at the original basis and been liable for the full capital gains at sale.

To: ratan lal who wrote (32425)	9/27/2000 4:03:32 PM
From: gingersreisse	Read Replies (1) \| Respond to of 54805

re: life insurance as noted, the vetoed estate tax bill would have eliminated the step up at death for most appreciated equities, meaning the survivor would inherit the original basis and capital gain liability. Several tax writers speculate the new bill will have a $3-5mn exclusion, but may exempt some 401k or IRA assets and farms owned by families from any estate tax if the limit is set lower than $3mn. Many private foundations and gift trusts are funded with equity linked life insurance as means of maximizing the $10,000 gift tax ceiling, or even exceeding it and paying the tax. There's very creative work in buy-sell plans for art and sculpture collections using life insurance. You contribute the money, the foundation uses it to buy life insurance, later, you die. Some of your art is donated at death to a museum to get a tax benefit. Your foundation uses the insurance proceeds to purchase your remaining art from your estate at fair market, which gives your estate cash to pay the remaining estate taxes. Many colleges and museums are expert in setting up these programs and are often beneficiaries of the foundation. GSR