[quote=flu]I wonder if the biggest impact what is being proposed have the biggest impact on the middle class that plans on passing on a small biz or primary home to their kids, especially the baby boomers.

Afterall, if my understanding is correct, the proposal also eliminates the capital gains exemption from properties over $500k (not sure how small farms would work)…So…..upon death, the youngsters will need to cough up the capital gains tax bill or sell the property (and most likely they won’t have the money to pay the tax bill)….So in high cost areas…ouch…..And chances are, most of these middle class heirs won’t have the money for the cap gains bill.

For rich(er) people, this won’t be a problem, since I’m sure aforementioned heirs already have their trust funds set up well before that…

Oh, an foreign money aren’t subject to this, so that’s great news for foreign money…

Can you say, screw the upper middle class again?[/quote]
If your understanding is correct and this goes through, then it would make perfect sense to do a cash out refi and then let the property foreclose near your death. That would guarantee your tax rate of the property to be 20% or less, depending on how much they let you pull out. Or you can slowly withdraw money out of your house to help your kids pay for their houses. Then foreclose on your properties. At near death. In another word, there’s no point in having a paid off house if the intention is to pass it on.