What's New in Texas Family Law - Estate Taxes

The Estate Tax Has Expired

The Estate Tax law has expired for any size of estate. In other words, estates of any size will pay no estate tax. However, the same law removed the step-up in basis that the heirs would enjoy at the time of the death of the loved one.

Historically, for example, if father dies owning a house valued at $100,000.00, but he bought it when it was worth $25,000.00 the heirs would enjoy the “step-up” in basis to the $100,000.00 and pay no capital gain.

That rule expired with the estate tax, meaning that heirs would then have to pay capital gains on the increase in value of estate assets. No doubt, Congress will address this in the very near future.