Biden’s Capital Gains Plan Triggers Inheritance Tax Concerns

A Biden administration proposal to increase the capital gains rate on inherited wealth has ratcheted up interest in taxes levied upon death or transfer of wealth.

Although much of the attention has focused on the federal estate tax—which is levied on an actual estate—planners should also consider ramifications for those states that have an inheritance tax.

Currently there is no federal inheritance tax. However six states impose an inheritance tax as opposed to an estate tax. The administration’s proposal to tax the gain in value on inherited property outside the estate tax functions similarly to some states’ inheritance tax, which ...