[long_time_gone]

I hope you didn't fall asleep before reading the next two sentences:

"But even if owners ultimately repay the taxes they skipped, deferring payment of those taxes for years, sometimes decades, essentially amounts to an interest-free loan from taxpayers. An owner could reap huge gains by investing that money."

"If owners die while holding their stake, as many do, the tax savings may never be repaid. And their heirs can generally restart the amortization cycle anew."

These are each clear loopholes. The first sentence is about how time value of money matters when talking about billions of dollars. The second sentence gives you an idea of why it was so "important" to weaken the Estate Tax in 2017.

[sumobob2112]

The first sounds like the government is encouraging investment in capital infrastructure leading to growth. This happens all the time and its a non-story.

I cant speak to the tax burden on inheritance, I know debts and expenses are often paid out of an estate first however.

[xur17]

This would also allow the owners to realize this money as capital gains instead of income (lower tax rate), right?

[long_time_gone]

Yes, I also believe they wouldn't pay Social Security or Medicare taxes on it.

[kristjansson]

Ah, the best of all tax loopholes, _death_

[jcheng]

It really is a tax loophole though--for capital gains, the basis is reset upon transferring to your heirs.

https://www.investopedia.com/terms/s/stepupinbasis.asp https://www.peoplestaxpage.org/buy-borrow-die

[kristjansson]

Yes, the joke being that it's sort of hard to personally recognize the benefits of the loophole.

Basis step up should be eliminated though. I can't see any economic justification for it.