Carryover Basis Election at Death

Posted: 28 Dec 2000


In light of a new administration taking the Oval Office, there is renewed discussion of repealing the transfer tax system and introducing a carryover basis rule associated with asset transfers occurring at death. While there is much theoretical justification for a carryover basis rule, history has taught us that, in practice, its adoption will not likely succeed.

This article proposes an alternative that is administratively feasible, equitable, and addresses the liquidity concerns of farmers and small business owners. It would maintain the transfer tax system yet reform it to operate in tandem with the income tax system. More specifically, all taxable estates would be allowed to make a carryover basis election with respect to any asset owned by the decedent at the time of death. In return for making this election, the executor of a decedent's estate would be allowed an estate tax credit. The amount of the estate tax credit would equal the highest income tax rate applicable on the asset's sale multiplied by the asset's unrealized gain.

Suggested Citation

Soled, Jay, Carryover Basis Election at Death. Available at SSRN:

Jay Soled (Contact Author)

Rutgers University ( email )

1 Washington Park
Newark, NJ 07901-1825
United States
(973) 353-1727 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics