Tonight’s State of the Union – One Tax Change Explained

Tonight President Obama will give the State of the Union Address to the country. Among various other tax changes one particular item caught my eye.

Trust Fund Loophole

This is a catchy name for the discontinuation of step up in basis.  Under current law asset prices are reset to fair market value at the date of death aka “Step up in Basis”Uncle Sam $

So if your elder heir purchased a stock for $1 and at death is was worth $150, there would be no taxes on the new higher basis.

Sounds like a big tax increase, but multiple planning techniques come to mind that would help thwart these taxes, should it get passed.

If the Estate Tax, currently at over $5 million per person is left alone, we can navigate the loss of a step up in basis.

Have a Great Day!

John A. Kvale CFA, CFP

PS Pretty excited to watch…. ya ya .. nerds!
8222 Douglas Ave # 590
Dallas, TX 75225

Leave a Reply