The possibility of estate tax repeal has become more likely with the election of Donald Trump and the Republican congress. If in fact, repeal takes place will it be permanent? Will something else take the place of estate tax in order to replace the government’s lost revenue?
First, the likelihood of permanency is unlikely. The democrats will probably gain control one day. Even if they don’t, many experts agree that the estate tax will be replaced with other taxes at death. One in particular is the repeal of the step up in basis. Carry over of basis to the next generation will create a good amount of revenue for the government. Second, the government may also be considering the elimination of the stretch IRA. This will not allow the next generation to defer taxes on inherited IRA’s.
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