Thursday, April 14, 2005

Neil Boortz and Estate Taxes

Dear Neil,

While you are right about democrats being against sucess, you are dead wrong on what is being proposed as being better.

Right now, with no taxes owed on estates under the current limits, those same estate will owe CAPITAL GAINS taxes on those assets within the estate that are inherited. There is no step-up in valuation.

So, that 2 million dollar house your parents theoretically leave you that cost them 100K, well, you will owe capital gains taxes on 1.9 million. Even assuming a 20% federal rate, you are on the hook for 380,000 in taxes.

Under the old plan, you owe 0.

So please quit spouting off about how this new plan is better. It isn't. The only way you can be sure it would be is IF you still get the step up in valuation at the time of death. I wish you would think through more than one scenario before deciding how good or bad it is.

Ernest Moosa


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