NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Revenue and Incentive Effects of Basis Step-Up at Death: Lessons from the 2010 "Voluntary" Estate Tax Regime

Robert Gordon, David Joulfaian, James Poterba

NBER Working Paper No. 22090
Issued in March 2016
NBER Program(s):Public Economics

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.

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Document Object Identifier (DOI): 10.3386/w22090

Published: Robert Gordon & David Joulfaian & James Poterba, 2016. "Revenue and Incentive Effects of Basis Step-Up at Death: Lessons from the 2010 “Voluntary” Estate Tax Regime," American Economic Review, vol 106(5), pages 662-667. citation courtesy of

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