Transfer of Decedent's Basis at Death: The Allocated Carryover Approach

Authors

Rodney J. Waldbaum

Abstract

Congressional dissatisfaction with the effects of IRC 1014(a) which, although death is not treated as a taxable event for income tax purposes, grants a stepped-up basis in inherited property resulting in gains tax forgiveness on appreciated property held at death, has prompted suggested legislation aimed at the at-death taxation as capital gains of all appreciation on property held at death. This comment urges, instead, that the decedent's tax basis in non-cash assets should be carried over to his successors and allocated on the basis of the market value of the transferred assets. The required legislation and mechanics for implementation of the proposed alternative are also presented. This proposal would avoid the overwhelming liquidity and valuation problems inherent in at-death taxation while ending complete tax forgiveness.

First Page

121

Recommended Citation

Rodney J. Waldbaum, Comment, Transfer of Decedent's Basis at Death: The Allocated Carryover Approach, 46 Wash. L. Rev. 121 (1970).
Available at: https://digitalcommons.law.uw.edu/wlr/vol46/iss1/5