• Our Promise to You During COVID-19/Coronavirus
    • Skip to primary navigation
    • Skip to main content
    • Skip to primary sidebar
    • Skip to footer
    • Home
    • Who We Are
      • About Our Firm
      • Attorney and Staff Profiles
      • Scott P. Schomer Certified As Specialist In Estate Planning, Trust And Probate Law
      • Trust and Probate Litigation: Verdicts and Settlements
    • Services
      • Legacy Planning
      • Probate
      • Asset Protection & Business Planning
      • Trust Administration
      • Trust, Probate and Estate Litigation
      • Estate and Gift Tax Figures
      • Family-Owned Businesses
      • IRA & Retirement Planning
      • LGBTQ Estate Planning
      • Loss of a Loved One
      • Power of Attorney
      • SECURE Act
      • Special Needs Planning
      • Young Families
    • Probate
      • Is Probate Always Necessary In California?
      • Why Hire A Probate Attorney
      • Probate Administration
      • Probate & Estate Planning Savings Calculator
      • Probate Code 850 Petitions
      • Probate Disputes
      • Probate In California
      • Probate Laws
      • Probate Litigation
    • Elder Law
      • Conservatorship
      • Coping with Alzheimer’s
      • Estate Planning
    • Resources
      • Elder Law
        • Elder Law & Medicaid Definitions
        • Elder Law Reports
      • Estate Planning
        • Estate Planning Articles
        • Estate Planning Checkup
        • Estate Planning Definitions
        • Estate Planning Reports
          • Advanced Estate Planning
          • Basic Estate Planning
          • Estate Planning for Niches
          • Trust Administration
        • Incapacity Planning Definitions
        • Is Your Estate Plan Outdated?
        • Special Needs Planning Can Protect Benefits
        • Top 10 Estate and Legacy Planning Techniques
      • Free Estate Planning Worksheet
      • Free Seminars
        • Webinars
      • Frequently Asked Questions
        • Advance Health Care Directives
        • Asset Protection
        • California Adult Conservatorship
        • Estate Planning
        • Estate Planning & Remarriage
        • Frequently Asked Questions For Families Without An Estate Plan
        • Incapacity Planning
        • In-Home Elder Care
        • IRA Inheritance Planning
        • IRA & SECURE Act
        • Irrevocable Trust
        • Legacy Wealth Planning
        • LGBTQ Estate Planning
        • Living Trust
        • Probate
        • Social Security & Medicare
        • Special Needs Planning
        • Trust Administration
        • Wills
      • Newsletters
      • Pre Consultation Form
      • Presentation
      • Published Book
      • Trust Administration & Probate Resources
        • Bereavement Resources
        • How to Know if You Need Extra Help With Your Grieving
        • Loss of a Loved One
        • The Mourner’s Bill of Rights
        • Things You Need To Do When a Loved One Passes Away With a Trust
        • Things You Need To Do When a Loved One Passes Away With a Will
        • Trust Administration & Probate Definitions
    • Reviews
      • Our Reviews
      • Review Us
    • Communities We Serve
      • Los Angeles County
        • Bellflower
        • Cerritos
        • El Segundo
          • El Segundo Probate Resources
        • Hawthorne
        • Inglewood
        • Long Beach
          • Long Beach Elder Resources
          • Long Beach Probate Resources
        • Manhattan Beach
        • Playa del Rey
        • Santa Monica
        • Westchester
          • Westchester Elder Resources
          • Westchester Probate Resources
      • Orange County
        • Anaheim
        • Buena Park
        • Cypress
        • Fountain Valley
        • Garden Grove
        • Huntington Beach
          • Huntington Beach Elder Resources
          • Huntington Beach Probate Resources
        • Los Alamitos
          • Los Alamitos Probate Resources
        • Rossmoor
        • Stanton
        • Seal Beach
        • Westminster
    • Contact Us
    • BLOG
    • Videos

    Schomer Law Group, Los Angeles Estate Planning and Elder Law and Elder Law Attorneys

    Schomer Law Group, Los Angeles Estate Planning and Elder Law and Elder Law Attorneys

    Connect With Us Today (310) 337-7696

    Attend a Free Webinar
    Home » Estate Planning » Step-Up in Basis May Be Targeted

    Step-Up in Basis May Be Targeted

    January 3, 2021Estate Planning

    step-up in basisThere can be changes to tax laws that have an impact on your estate plan, and they often come about when a new presidential administration takes office. We are going to look at two matters that fit into this category, and we will start with capital gains taxes on inherited assets.

    Stepped-Up Basis Reform

    When numerous different candidates were vying for the Democratic presidential nomination, we heard a lot of different platform positions. Some of the candidates were in favor of the enactment of a new “wealth tax” that would target the super-rich.

    Short of this, there can be changes to existing tax laws that would increase the burden that high net worth individuals must shoulder. Along these lines, president-elect Joe Biden has stated that he is in favor of an elimination of the step-up in basis for capital gains purposes.

    As it stands right now, if you inherit assets that appreciated during the life of the person that left you the resources, you would not have no capital gains tax responsibility. Very wealthy people can use this loophole to transfer a great deal of generational wealth tax-free.

    For example, Tesla was co-founded by Elon Musk, and he owns 20 percent of the company’s stock. At the time of this writing, he is the second richest person in the world, and his wealth keeps growing as Tesla stock keeps increasing in value.

    All of these massive stock gains could be transferred to his heirs after his passing, the capital gains tax would never enter the picture. This is an extreme example, but you get the point.

    Biden would use the revenue that is generated by the elimination of the step-up in basis to support his proposal to provide American students with two years of free community college.

    This is a relevant matter that you should be aware of from an inheritance planning perspective. As time passes, we will continue to monitor the situation and share any updates that become available.

    Tax Cuts and Jobs Act Sunset Date

    At the end of 2010, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act (H.R. 4853) was enacted. It established a $5 million estate tax exclusion. The exclusion is the amount that can be transferred before the estate tax will be applied on the remainder.

    There was another tax bill passed two years later, and it retained the same exclusion adjusted for inflation. This arrangement remained in place until 2017 when the exclusion was $5.49 million after a series of inflation adjustments.

    In December of 2017, the Tax Cuts and Jobs Act was enacted, and it reflected the will of the majority on Capitol Hill at that time. The estate tax exclusion was doubled for 2018 with an added inflation adjustment which brought the figure up to $11.18 million.

    The exclusion in 2021 is $11.7 million, and this figure adjusted for inflation will remain intact through the 2025 calendar year if there are no new laws enacted in the meantime.

    At the end of 2025, the exclusion provision that is contained within the aforementioned Tax Cuts and Jobs Act will expire or sunset. At that time, the exclusion will revert back to the $5.49 million that we had in 2017 adjusted for inflation.

    Of course, there can in fact be a new measure passed between now and then that impacts the estate tax, and there could be a subsequent piece of legislation. This is another fluid situation that we will monitor closely.

    Attend a Free Webinar

    Since you are on this site, you must be looking for information about estate planning and elder care, and you are in the right place. There are many written materials that you can access free of charge, and you can really take your knowledge to another level if you attend one of our webinars.

    The sessions are offered free of charge, and you don’t have to go anywhere to join us, so you should definitely take advantage of this opportunity.

    You can see the schedule if you visit our webinar page, and when you identify the session that works for you, follow the simple instructions to register.

    • Author
    • Recent Posts
    Scott Schomer, Estate Planning Attorney
    Scott Schomer, Estate Planning Attorney
    A graduate of Boston University School of Law, Scott P. Schomer is a frequent lecturer on estate planning and elder law issues, having discussed these important issues on local and national television. A seasoned courtroom advocate, Scott has obtained combined judgments and verdicts in excess of twenty-five million dollars for his clients. Scott has served as a member of the Los Angeles Superior Court Probate Volunteer Panel (PVP Attorney), Probate Settlement Panel and a Judge Pro Tempore. Scott's expertise has been recognized by his peers with such accolades as a life-time membership in the Multi-Million Dollar Advocates Forum, the Five Star Wealth Manager designation, and repeated nominations as California Super Lawyer.
    Scott Schomer, Estate Planning Attorney
    Latest posts by Scott Schomer, Estate Planning Attorney (see all)
    • Why Should I Use a Living Trust to Distribute My Estate? - May 17, 2022
    • The Importance of Liquidity in Your Estate Plan - May 11, 2022
    • Why Would I Want to Make a Trust Irrevocable? - May 10, 2022

    Other Articles You May Find Useful

    liquidity
    The Importance of Liquidity in Your Estate Plan
    Los Angeles trust attorney
    What Is a GRIT and Do I Need One?
    What an In Terrerem Clause Can Do for You
    Business Succession Planning May Be Easier than You Think
    The Toll of Serving as Fiduciary
    The Power in Powers of Appointment

    Primary Sidebar

    Schomer Law Group, Los Angeles Estate Planning and Elder Law Attorneys

    Schomer Law Group

    FREE Estate Planning Worksheet

    There's a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you'll be one step closer to getting yourself and your family on the path to a secure and happy future.

    Testimonials

    Client Review
    July 29, 2020
        

    We need to update our Living Trust and attended Schomer Law Group’s seminar. Afterwards we made an appointment and were impressed by the attention Scott Schomer and Liran Aliav gave to our case answering all questions and making suggestions how to minimize the estate tax. All the office staff is very friendly and we highly recommend Schomer Law Group.

    Frank & Jutta R
    Client Review
    July 29, 2020
        

    Mr. Schomer does an amazing job at explaining all the intricacies of establishing a trust. He and his team help you every step of the way so you always know what to expect and what you are preparing for. Best education you can get and the best gift you can give your family.

    Paula M.
    Client Review
    July 29, 2020
        

    We put off getting a trust for years. After attending a seminar with Scott Schomer we realized that the time had come to get a trust. We were given very good reasons for why we should get a trust. No pressure, just the plain facts. We are very relieved and happy to finally get our trust. Scott and Cesar were very knowledgeable, helpful and listened to our ideas of what we had to say. Any questions that we have now and in the future they are available to assist us to solve them. I recommend the Schomer Law Group and I wish we knew about them years ago.

    Phillip G.
    Client Review
    July 29, 2020
        

    When you’re presented with an invitation to attend in a mailer, you may have reservations, this was a truly gift!! My wife and I were educated and guided through the process of creating a family trust.
    Both of our parents had attorney’s that “worked” with wills/trusts, but came up short. Fortunately, the Schomer Law Group was there! This is a group of attorney’s that only specialize in estate planning, law, and financial advice, so you know you’re getting expert and personalized advice. This is the best money we’ve ever spent!! Thank you!

    Bob L.
    Client Review
    July 29, 2020
        

    We knew we had to update our 10 year old ( 20 page ) trust. After several detailed meetings, Liran and Cesar produced a large ( 300 pages + ) highly detailed trust document that we have used to make sure our family estate is well managed and clearly understood.
    They were all very helpful in answering myriad questions and explaining all the various options…

    We would strongly recommend the Schomer Law Group to anyone with an estate of even modest means, to assure proper planning…

    Bob S.
    Client Review
    July 29, 2020
        

    We had contemplated updating our will and starting a trust for a number of years. After attending a talk by Scott Schomer we realized we were long overdue and the potential downside of not having our affairs in order was significant. Scott and his excellent team made the process simple and seamless. They were great listeners, addressed all our concerns and even pulled and processed all the paperwork from our financial institutions. If you are looking for assistance with estate planning, wills and trusts, we highly recommend Schomer Law Group.

    Robert F.
    Client Review
    July 29, 2020
        

    Very competent & informative – friendly atmosphere – ready to answer the most mundane questions – relaxed.

    Joan S.
    Client Review
    July 29, 2020
        

    Mr. Schomer was excellent in getting our family trust and estate affairs in order. My husband and I had put off doing this and Scott really made the process easy! He is very passionate in making sure his clients get all that they need and we really appreciated it. I would highly recommend him and look forward to the many years he will be available to assist our family.

    Kim

    Follow Us

    • Facebook
    • Twitter
    • Linkdin
    • Youtube
    • Instagram

    Blog Subscribe

    • This field is for validation purposes and should be left unchanged.

    Office Address

    El Segundo
    222 North Pacific Coast Highway., Suite 130
    El Segundo, CA 90245
    Phone: (310) 337-7696
    Fax: 310-337-1277

    See Larger Map Get Directions

    Office Hours

    Monday9:00 AM - 6:00 PM
    Tuesday9:00 AM - 6:00 PM
    Wednesday9:00 AM - 6:00 PM
    Thursday9:00 AM - 6:00 PM
    Friday9:00 AM - 6:00 PM

    Footer

    • Advantages of Working With Our Firm
    • About The American Academy
    • Disclaimer
    • Privacy Policy
    • Sitemap
    • Contact Us

    Schomer Law Group

    Connect with Us

    • Facebook
    • Twitter
    • Linkdin
    • Youtube
    • Instagram

    footer-logo
    © 2022 American Academy of Estate Planning Attorneys, Inc.

    Schomer Law Group

    Attorney Advertisement.

    © 2022 American Academy of Estate Planning Attorneys, Inc.