[quote=sdrealtor]Of course they’ll find a way to make it work. When death comes they will get a step up in basis so they can sell tax free properties that lost decades old assessed real estate tax values. They’ll take the money and invest it in higher yielding opportunities than SD real estate as they should but again not our problem[/quote]
Well, Prop 19 already eliminates keeping the primary home’s tax basis unless the kids end up living in the home, and it’s only for the amount up to $1million, which pretty much eliminates most homes now in SD County from a complete prop tax carryover.
There was a lot of people trying to work around this but it involved putting your kids on the deed… Honestly though, for someone that did well in real estate in CA not carrying over the property tax basis isn’t really a big deal if your real estate is now worth a few million.
The other issue is the capital gains step up cost basis. That’s nice, but you can count on that being eliminated one of these days if the democrats maintain a significant majority in our government or at least eliminated for most people who have a accumulated a decent nest egg.
However, I think well off people can work around that too. Flyer you should be aware of these accounting tricks and tax strategies. For example, using Annuities and Life Insurance which have very favorable tax treatments and also Irrevocable Trusts and Corps which potentially can allow the entity to persist and maintain many tax benefits, at a cost of the issue of a lot of paperwork and possible double taxation. Things you should be very familiar with if you are indeed wealthy, or if you were just given your wealth without the practical operating knowledge, your parents or your spouse’s parents probably already figured it out with your the family CPAs for you.
