He proposes to repeal a currently allowed tax adjustment known as step up in basis. Currently, when people die with stocks, real estate and other assets that grew in value during their lifetimes, heirs who inherit those assets don't have to pay capital gains tax on any of the appreciation that occurred under the previous owner. The purchase price of the assets, which is used to determine capital gains tax liability, is adjusted -- "stepped up" -- to the current market value. No taxes are paid at death, and the eventual tax bill is much lower when the heirs finally sell the assets.
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