[jjeaff]

Nope.. It IS a free money hack for the wealthy. The stepped up basis happens the day of your death. So when the estate sells assets to cover the liabilities, the profit of the sale will be calculated by subtracting the new stepped up basis from the sale price (effectively $0) so no tax.

Additionally, the wealthy will usually leave only enough assets in the estate to cover the liabilities plus maybe some more up to the estate tax threshold so it goes through tax free to the heirs. The rest will have been distributed through various other methods to avoid taxation.

[dataflow]

Do I understand correctly that you're basically saying low inheritance taxes are (most of) the justification for wash sale rules?

[jjeaff]

No, I don't think inheritance tax factors in here that much. Wash sale rules don't really apply when using the step up basis loophole.