I gather the reason for the step-up basis is to avoid taxing an asset that's already subject to estate tax, but that seems like an awkward solution. Especially since there have been attempts to reduce or eliminate the estate tax not to mention various dodges that exist. I think it would make more sense to eliminate the step-up basis (which is proposed by Kamala Harris) and just limit the scope of the estate tax to exclude capital assets. Tax is paid on gains as per normal with no exceptions.