Policy Issues

Step-Up In Basis


When an individual dies, the U.S. levies a comprehensive tax on his or her wealth and assets, including unrealized gains, through the estate tax where wealth that exceeds an exemption amount ($6 million in 2022) generally is taxed at a rate of 40%. Separately, for income tax purposes, the basis of assets in the hands of an heir is “stepped up” to fair market value at the time of the decedent’s death.

President Biden and some lawmakers have proposed adding a second layer of tax at death, on top of the estate tax, by imposing a capital gains income tax of 39.6% on a decedent’s unrealized gains, effectively repealing current law’s step-up in basis.

Capitol Dome Am Flag


Applying capital gains tax to appreciated property at the same time that the tax code is applying a 40% estate tax to the asset’s full fair market value is punitive and confiscatory and would force many family-owned and closely held real estate businesses to liquidate rather than grow and continue from one generation to the next.


In 2021, The Roundtable and other members of the Family Business Estate Tax Coalition commissioned EY’s Dr. Bob Carroll, the former Deputy Assistant Secretary of Treasury for Tax Analysis, to evaluate the economic consequences of eliminating step-up in basis. The report concluded that if step-up in basis were repealed, 40,000 jobs would be lost every year in the first 10 years after enactment, and GDP would decrease by $50 billion over 10 years.

The coalition’s report and sustained, coordinated advocacy, including letters to key lawmakers, played a central role in persuading the congressional majority to retain longstanding tax rules that apply to assets transferred at death in the House-passed BBB Act.

Report: Repealing step-up of basis on inherited assets: Macroeconomic impacts and effects on illustrative family businesses



Roundtable Weekly
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Staff Contact
RM-Oct2019 - contact Ryan P. McCormick
 Senior Vice President & Counsel

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