Posted on January 25, 2006 at 16:49:48:
Though Congress has made a lot of noise about estate taxes, they really don’t affect very many people. In 2003, for instance, only 1.25 percent of all deaths triggered the tax. The really, really rich paid a lot. There were 505 estates worth more than $20 million each; together they paid $5.2 billion in taxes.
This year, only those estates over $2 million will owe federal taxes. In most cases, this is not “double taxation.” Much of the assets represent unrealized gains, like appreciated stock that ahs never been sold or taxed.
When the heirs sell, at a stepped-up basis, little or no tax is due. That stepped-up basis – assets are revalued at the time of death – would disappear under most proposed laws to eliminate estate taxes, which would hurt many more only-moderately-wealthy people and heirs of appreciated homes.