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Biden to get rid of "step-up in basis".

Joe Biden has proposed to eliminate a tax policy called "step-up in basis" that reduces taxes on inherited assets such as real estate and stocks.

Joe Biden has proposed to eliminate a tax policy called "step-up in basis" that reduces taxes on inherited assets such as real estate and stocks. Under the current law, assets passed on to heirs receive an increase in their value, called "step-up in basis," such that the assets are worth their market value at the time of the decedent's death. As a result, the policy provides tax benefits for everyone passing down appreciated assets since it reduces the amount of capital gains tax that the heir owes.

By eliminating this "step-up in basis", Biden seeks to increase taxes on capital gains by subjecting gains to the same tax rate as ordinary income for households earning more than $1 million, according to CNBC. Additionally, Forbes adds that this policy would affect the heir as they would get "hit" by taxes during an inheritance transfer itself, without even earning gains via the asset's sale yet. That is, the idea that you could build up your business and escape death tax and income tax when you pass it to your kids is in danger, according to Forbes.

An ABC article states that Biden would direct the tax revenue generated from eliminating "step-up in basis" towards granting two years of free community college to students and investing $50 billion in high-quality job training programs.

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