Revenue and Incentive Effects of Basis Step-Up at Death: Lessons from the 2010 "Voluntary" Estate Tax Regime

Robert Gordon, David Joulfaian () and James Poterba

No 22090, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In 2010, the U.S. estate tax expired and executors of wealthy decedents were not required to file estate tax returns. In the absence of the estate tax, beneficiaries received assets with carryover rather than stepped-up basis. Unrealized capital gains accounted for 44 percent of the fair market value of non-cash assets in estates that chose the carryover basis regime, and an even higher percentage for some asset categories. Many of the largest gains were on assets that had been held for at least two decades.

JEL-codes: H24 (search for similar items in EconPapers)
Date: 2016-03
New Economics Papers: this item is included in nep-pbe
Note: PE
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Published as Robert Gordon & David Joulfaian & James Poterba, 2016. "Revenue and Incentive Effects of Basis Step-Up at Death: Lessons from the 2010 “Voluntary” Estate Tax Regime," American Economic Review, vol 106(5), pages 662-667.

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Journal Article: Revenue and Incentive Effects of Basis Step-Up at Death: Lessons from the 2010 "Voluntary" Estate Tax Regime (2016)
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