Retaining, Obtaining, and Sustaining Basis

Date

2014

Journal Title

Journal ISSN

Volume Title

Publisher

Texas Tech Estate Planning & Community Property Journal

Abstract

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.

Description

Keywords

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

Citation

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