That’s not really true, as the first paragraph explains:
It was a choice: pay the federal estate tax (35% over $5 million) immediately or pay capital gains taxes (15% of all gains) later.
Well, of course. I thought the point you were making was that Steinbrenner’s heirs didn’t get a full step-up basis. Which is only true because he died in 2010. In any other year they would have received a full step-up and paid the estate tax.
That is the point, but it has more to do with the false complaint that Steinbrenner’s heirs didn’t pay either tax, than your opinion that both should be paid.
Got it. Thanks for the clarification.
Jas09’s plan:
‘Pop’ buys a stock for $10. Many years later, he leaves it to ‘Junior’, and it’s worth $100. Assuming, for the sake of argument, that other assets have exceeded the minimum for inheritance tax, Junior has to pay $50 to receive the $100 stock. The stock now has a net worth of $50, but if/when he sells it he’ll have to pay taxes on his imaginary profit of $90. After Junior pays this tax on money already taken by the government, he’s left with $36.50. That’s at 15%. At the (desired by some) 39.6% rate for capital gains, he’s left with $14.36. That’s most likely, less than the original $10 (adjusted for inflation).