This little-known section of the tax code, § 1014(a), is a MASSIVE TAX BREAK FOR THE WEALTHY. It allows assets such as stocks and real estate to be passed on to heirs without paying capital gains taxes. It helps the rich get richer, and it is un-American.
Say your grandma bought 1000 shares of IBM stock in 1997 at $50/share, a total value of $50,000. Your grandma passes away and the stock is now worth $200/share (or $200,000), a 300% increase. If your grandma had sold the stock she would have paid capital gains taxes equal to 15% of her $150,000 profit, or $22,500.
But if you inherit the stock, the IRS treats it as if you just bought it for its current price, so no taxes are ever paid on the $150,000 of profit.
Get rid of this tax break for the wealthy that is quietly costing billions.