I am not trying to be political, however listed below is a link to story about Hillary Clinton promising to raise the inheritance tax and adding more taxes and regulations to small business owners if she is elected. The story ran in Friday September 23, 2016 edition of the Wall Street Journal.
She is also saying that she will eliminate the tax rule, which allows for the value of an asset to be given a stepped up basis when someone dies and it is inherited by their family. For example. The way the tax law reads now is that if you own an asset worth $5MIL and your basis (or cost of the asset was $1MIL) then when you die your relatives or individuals who inherit your $5MIL asset will get to use a stepped basis of $5MIL. So when they sell the asset they only have to pay taxes on the amount above the new stepped up basis of $5MIL.
Hilary wants to get rid of this law and instead make your family or individuals who inherit the $5MIL asset to pay capital gains on the difference between $1MIL and $5MIL. And God only knows what the new capital gains rates will be if she has it her way.
What the increased inheritance tax does is create a confiscation of family owned businesses. Family owned businesses and farms which were built and paid for with money that has already been taxed are going to be taxed again at death, which sometimes forces the individuals who are inheriting the businesses and farms to have to sell the family business in order to pay the taxes, therefore creating a confiscation of the asset by the Federal Government.
Bad stuff possibly ahead. But it pays to be informed as to what is going on that can dramatically affect our families and our businesses.
All the best.
Terry
