Revenue and Incentive Effects of Basis Step-Up at Death: Lessons from the 2010 “Voluntary” Estate Tax Regime
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Poterba_Revenue and incentive.pdf
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476.33 KB
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084939735e8090b34bc8ae0890e55176
Author(s)
Gordon, Robert
Joulfaian, David
Poterba, James Michael
Date Issued
May 2016
Journal
American Economic Review
Publisher
American Economic Association
Citation
Gordon, Robert; Joulfaian, David and Poterba, James. “Revenue and Incentive Effects of Basis Step-Up at Death: Lessons from the 2010 ‘Voluntary’ Estate Tax Regime.” American Economic Review 106, no. 5 (May 2016): 662–667 © 2016 American Economic Association
Version
Final published version
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.
MIT Department
Massachusetts Institute of Technology. Department of Economics
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Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1257/aer.p20161037
