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AICPA opposes capital gains at death.

The American Institute of CPAs has taken a stand against any forth-coming proposals that call for taxing appreciation on property at the owners death. The issue came to the fore recently when President Clinton said such taxation might be considered.

"We are anxious for any proposed bill to be exposed to testimony so the adoption or rejection would be on the merits, since we believe our opposition is on the merits," said Arthur S. Hoffman, chairman of the AICPA task force on recognition of appreciation of assets at death. Hoffman is a partner of Goldstein, Golub, Kessler and Co. in New York City.

The fight over taxing capital gains at death was previously fought in the 1970s. At that time, the Institute declared its opposition during testimony on the 1976 Tax Reform Act, which originally had adopted carryover of a decedent's basis. But after intense criticism of the complexity of carryover and the failure of efforts to simplify it, carryover was placed in moratorium and then repealed.

According to Hoffman, the AICPA tax executive committee adopted its position against capital gains at death on the grounds that

* Appreciation is subject to very high estate tax rates.

* Income should be taxed only when cash becomes available through an asset's sale.

* An income tax on appreciation compounds the severe liquidity problems faced by estates, especially estates that own closely held businesses or farms.
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Publication:Journal of Accountancy
Article Type:Brief Article
Date:Apr 1, 1993
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