Let’s talk taxes—specifically, the kind that could completely screw up your family’s inheritance.
One proposal floating around Washington could eliminate the “step-up in basis,” and if you’ve never heard of that before, let me explain why that’s a big deal. In short: it could mean a massive tax bill for your kids when they inherit your house, rental property, or anything else that’s grown in value.
And yeah—it’s a lot worse than it sounds.
What’s Step-Up in Basis, Anyway?
Let’s say your parents bought a house in 1980 for $100,000. When they pass away, the house is worth $1 million. Under current law, you inherit it at its fair market value—so you don’t owe taxes on the $900,000 gain if you sell right away.
But if step-up in basis goes away? You inherit the house at the original $100,000 basis. You sell it for $1 million—and BAM, you’re on the hook for capital gains taxes on $900,000. That’s a huge check to write to the IRS.
Who Gets Hurt?
You might think this is a “rich people problem.” Nope. The truth is, it would hit middle-class families the hardest—families who’ve worked their whole lives to build up:
- A modest home
- A rental property or two
- A small business
- Some investments or stocks
If you’re not rolling in cash, paying off a six-figure tax bill just to keep a property in the family? Not so easy. Many families would be forced to sell.
What Can You Do About It?
Look, we don’t know exactly what’s going to happen in Congress. But waiting to find out is not a strategy. Here are some smart moves you can make now:
- Use Trusts Strategically – A good trust can help avoid unnecessary taxes and probate.
- Gift Assets Now – Gifting during your lifetime can lock in current tax rules.
- Invest Tax-Smart – Roth IRAs, insurance products, 529 plans—they’re your friends.
- Get Life Insurance – A tax-free payout your heirs can use to pay any taxes.
- Think Charitably – Donating appreciated assets can reduce your tax exposure and do some good.
Bottom Line: Don’t Wait
If step-up in basis disappears and you haven’t updated your estate plan? You could be leaving your loved ones a mess—and a bill.
Let’s not do that.
👉 Request a Consultation and let’s get a plan in place before the tax laws change. Because your family deserves to inherit a legacy—not a tax nightmare.