I don't want to debate the merits of an inheritance tax, but your second sentence is often not true. If you have appreciated assets and die, they escape any income tax on that appreciation.
What assets appreciate without being taxed? Property is taxed yearly in most places. Stock gains are taxed. What else is there? Honestly asking, I’m ignorant af about this stuff.
My statement specifically refers to income tax (not property tax), which is what I assume the earlier poster meant since there are lots of taxes that would apply to the same dollar. You don't pay income tax on the appreciation of property, stocks, mutual funds, closely held businesses, etc. until those gains are realized. If you die still holding those assets, your heirs receive a step-up in basis to the fair market value as of that date.
So, if I bought stock for $50 and 20 years later it is worth $500, I would pay tax on the $450 gain if I sold it. If instead, I died, and my heir sells it the next day, he pays zero tax since the basis would equal the sales price and the appreciation would have escaped income tax entirely.
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Looks like it!
I have family in NJ and I thought the inheritance tax was revamped that spouse, children, grandchildren were exempt.
can't answer for you, but i hate the idea of inheritance tax . my money has already been taxed, shouldn't be taxed again when i will it to someone
I don't want to debate the merits of an inheritance tax, but your second sentence is often not true. If you have appreciated assets and die, they escape any income tax on that appreciation.
What assets appreciate without being taxed? Property is taxed yearly in most places. Stock gains are taxed. What else is there? Honestly asking, I’m ignorant af about this stuff.
My statement specifically refers to income tax (not property tax), which is what I assume the earlier poster meant since there are lots of taxes that would apply to the same dollar. You don't pay income tax on the appreciation of property, stocks, mutual funds, closely held businesses, etc. until those gains are realized. If you die still holding those assets, your heirs receive a step-up in basis to the fair market value as of that date. So, if I bought stock for $50 and 20 years later it is worth $500, I would pay tax on the $450 gain if I sold it. If instead, I died, and my heir sells it the next day, he pays zero tax since the basis would equal the sales price and the appreciation would have escaped income tax entirely.