In article ,
 "Iva"  wrote:

> "Kurt Ullman"  wrote in message 
> news:kurtullman-36C295.09151604112007{at}032-478-847.area7.spcsdns.net...
> >  As a follow-up, inheritance taxes run 45% above a certain point
> > currently, bordering on confiscatory. Also, with the repeal of the
> > inheritance tax there would be no step-up in the basis for computing
> > taxes (especially cap gains) like there is now. So, when the second 
> > (or
> > third or fourth or whatever) generation sold the asset, they would 
> > still
> > be using the first generation's basis for tax purposes. Thus, the 
> > taxes
> > would be paid eventually.
> 
> Economic nit-picking here, you mean the federal Estate Tax, NOT 
> inheritance tax.  Many states don't have an inheritance tax, but 
> they're all subject to the federal estate tax.  In Pennsylvania, the 
> highest rate of inheritance tax is 15% and it's imposed on the *net* 
> estate, not the gross estate.
> 
     Yep. Not sure what you mean about net vs gross estate. All of the 
taxes are paid on what is left after the expenses of the estate have 
been taken care of and there are cut outs (biggest being to the spouse 
w/o tax)  Although it works out to be pretty much the same thing. It is 
taken out of the estate before the official inheritance, but the 
inheritance is obviously lessened by the amount of the tax. 

> And you do get the step-up in basis for stocks from the state 
> inheritance tax, not only from the federal estate tax.
   But again, when the Estate tax goes away (for a year currently), so 
does the step-up in basis.
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