How Treasury and the IRS Have Allowed High-Net-Worth Taxpayers to Exploit Stepped-Up Basis on Intergenerational Wealth Transfers, and How They Can Stop It: Answers to Question for the Record

7 Pages Posted: 24 Mar 2022

See all articles by Daniel J. Hemel

Daniel J. Hemel

New York University School of Law

Date Written: January 17, 2022

Abstract

This document, prepared as a response to a Question for the Record from House Ways & Means Subcommittee on Oversight Chair Bill Pascrell, explains how previous actions by Treasury and the IRS have facilitated strategies that allow high-net-worth individuals and families to exploit stepped-up basis while also avoiding federal estate and gift taxes on intergenerational transfers of wealth. It also identifies specific steps that Treasury and the IRS can take on their own -- without any additional legislative action by Congress -- that would prevent high-net-worth taxpayers from continuing to exploit these strategies.

Keywords: stepped-up basis, intentionally defective grantor trusts, Treasury regulations, revenue rulings, private letter rulings

JEL Classification: K34

Suggested Citation

Hemel, Daniel J., How Treasury and the IRS Have Allowed High-Net-Worth Taxpayers to Exploit Stepped-Up Basis on Intergenerational Wealth Transfers, and How They Can Stop It: Answers to Question for the Record (January 17, 2022). Available at SSRN: https://ssrn.com/abstract=4024396 or http://dx.doi.org/10.2139/ssrn.4024396

Daniel J. Hemel (Contact Author)

New York University School of Law ( email )

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