Every few years or so, with this year being no exception, there is talk in Washington of eliminating or reducing one of the greatest real or perceived tax benefits out there for the wealthy, the so-called stepped-up basis for property passed on at death. The concept of basis itself, and its impact on income and capital-gains taxation, is an often-overlooked aspect of estate and business planning as some advisors may choose to instead focus on transfer (estate, gift, or generation-skipping) taxes. In the context of a closely held business, the step-up is there for the survivors, often the estate who may immediately sell the interest, but it also may be of particular benefit to those who stay involved with the business although anticipate some future lifetime sale..
Author: Mark McLennon, JD, CPA/PFS, CFP, CLU, ChFC, has focused on the business, financial, and estate planning concerns of entrepreneurs, key employees, and other professionals as a Fortune 100 company executive, a tax consultant at a public accounting firm, an attorney in the estate planning group of a large Milwaukee law firm, and as an assistant professor with The American College of Financial Services. Mark has over two decades of industry experience working initially as a tax and advanced planning attorney but ultimately taking on executive roles which included oversight of fee-based financial planning, personal trust administration, and related wealth management efforts. He currently is a trust strategist with Baird Trust Company.
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