[pbspelly]

I've never understood the justification for the stepped-up basis, particularly for things like stocks. Someone gives you stocks they bought for $5000 that are worth $10,000 when they give them to you, and you sell them for $10,000, you owe capital gains on the $5,000 gain. Someone dies and leaves the same stocks to you in their will, and you sell them for $10,000, you owe nothing on the $5000 gain. Why does their death wipe out tax liability for the $5000 gain? I'm not a tax lawyer, and maybe there is some justification, but I don't see it.

Likewise, the carried interest treatment for hedge fund manager income has always seemed like a huge loophole to me.