The Biden administration has proposed substantial changes in the estate tax laws.  The current exemption from federal estate tax is $11.7 million.  This means that decedent's estates less than $11.7 million will not pay estate tax.  The proposed change would lower the estate tax exemption to $3.5 million.  This means that any estate over $3.5 million would pay federal estate taxes of about  30% or greater depending on the size of the estate.  Another change would be the partial elimination of the step up in basis rule.  Currently when a decedent dies, all capital assets get a "step up" in basis to the value at the date of death.  Then if the heirs subsequently sell a capital assets the new purchase price value is the date of death value and not the original purchase price.  This was a valuable tax rule that allowed decedent's to pass property to their heirs.  The proposal would eliminate the step up in basis rule and would require heirs to pay full capital gains based upon the original purchase price.  The proposal allows a step up in basis for the first $1.0 million and above that the new rule applies.  This proposed legislation is being blocked in the US Senate and has not passed and is not law at this time.