No Estate tax this year, sounds good, but watch out for more capital gains – loss of step-up in basis

This affects those estates with capital gains of more than $1.3 million and for a spouse, there’s a $3 million threshold.   For those fortunate enough to have substantial gains over their lifetime, their executors will need to do some archeological digging to find stock splits, capital improvements, and other factors affecting cost basis.

Also, allocating the $1.3 million exemption for heirs receiving different properties, stocks, business interests, etc. will make the executor’s job more difficult.

Here’s a nice article on this topic:

http://www.businessweek.com/magazine/content/10_17/b4175060827653.htm

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