LogFAQs > #931708230

At whos expense?

Romney and Bennet would pay for the change in part by repealing stepped-up basis. Thats a federal tax rule that greatly reduces the taxability of inherited property. It says that if, say, wealthy art collector Milburn Pennybags Sr. buys a painting for $10 that is worth $1 million when he dies years later, then Milburn Pennybags Jr. can sell it for $1.1 million and only pay capital gains tax on the $100,000 its appreciated between inheriting it and selling it. Under Romney and Bennets proposed change, the younger Pennybags would have to pay tax on the nearly $1.1 million in value the painting gained since his father bought it.