Estate Tax

Proposals to eliminate the stepped-up basis on inherited assets for gains of more than $1 million ($2 million for married couples) would needlessly strip working capital from dealerships, which are mostly second- and third-generation businesses operated as pass-throughs. 

Under this proposal, at the time of death, the capital gains rate would be assessed on the fair market value of the assets less the decedent’s basis as if the assets had been sold, triggering liquidity problems and tax compliance burdens, and eviscerating much of the benefit of the current federal estate tax exclusion.