Retaining, Obtaining, and Sustaining Basis



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Texas Tech Estate Planning & Community Property Journal


Argues that the enactment of American Taxpayer Relief Act of 2012 (ATRA) marked the beginning of a change in perspective on estate planning for high net worth individuals. The large gap between the transfer and income tax rates, which was the mathematical reason for aggressively transferring assets during lifetime, has narrowed considerably. With ATRA's very generous applicable exclusion provisions, the focus of estate planning will become less about avoiding the transfer taxes and more about avoiding income taxes. For new plans, estate planning requires a careful assessment of the income tax benefits of the "step-up" in basis against the transfer tax costs of including the assets in the estate. Maximizing the step-up will become an important tax savings tool for taxpayers and estate planners alike.



American Taxpayer Relief Act, ATRA, Income tax, Transfer tax, Step-up, Taxes, High net worth, Estate planning, Benefits, Savings


Turney P. Berry & Paul S. Lee, Retaining, Obtaining, and Sustaining Basis, 7 Est. Plan. & Cmty. Prop. L. J. 1 (2014).