How the estate tax affects the Chicago Bears

But I am over the NFL, so don't expect me to argue for estate tax changes

It’s tax time, and I’m getting a few tax statements related to my mother’s estate. It’s not because she had more than $13,610,000 in assets, but because a lot of her assets were held in retirement accounts, and I received a share of her final Social Security check. These distributions are taxable and are not included in the estate tax calculation.

The McCaskey family, on the other hand, is likely to have a massive estate tax obligation when Chicago Bears owner Virginia McCaskey finally dies. She is currently 102, so that’s not as ghoulish a statement as it seems. Virginia inherited the team when her father, George Halas, died in 1983. Over the last 40 years, the value of NFL teams has increased dramatically. If she were to sell the team today, she would have to pay a capital gains tax based on the value of the team at the time she inherited it and the sale price.

If her family waits until she dies, the team’s value will be stepped up it its value the day she dies, meaning that the family will not have to pay much of a capital gains tax. They can use the proceeds of the sale to offset the estate tax, although it’s entirely possible that some or all of Virgina McCaskey’s net worth has been set up to reduce or even eliminate the estate tax. (In fact, if all of her holdings are exposed to the estate tax, someone should be sued for malpractice.)

Until then, Chicago Bears fans are suffering because spending decisions are on hold.

But all of this illustrates a few things about the estate tax:

• Retirement accounts are taxable to beneficiaries, but they are not included in 2025’s $13,990,000 estate tax exclusion. I think that some people think that the estate tax is more common than it is because they had to pay taxes on an inherited retirement account.

• The value of any inheritance, taxable or not, is stepped up to fair market value on the day that the owner dies. This means that heirs who sell their inheritance won’t have to calculate the capital gain on the day that their ancestor acquired the property. This also means that they won’t have to figure out the cost basis from very old paper records. (This would be a major, major hassle.)

• There are a lot of ways to reduce the amount of the estate tax paid, through such things as life insurance, generation-skipping trusts, lifetime gifts, and tuition payments. Yes, payments for a child or grandchild’s education are exempt from estate and gift taxes.

• A lot of financial pundits talk about things that the wealthy do differently from everyone else. One reason is that they are trying to reduce estate tax obligations, not because they know something that no one else does. And you can bet that it costs money to set up plans that avoid estate taxes. You don’t want to pay that money unless you have more than $13,990,000 in non-retirement assets.

• Because of the high estate tax exclusion and ready availability of estate tax shelters, fewer than 1% of Americans leave a taxable estate, and generally, only estates of $20 million or more end up paying a tax.

Personally, I think the estate tax exemption should be lowered for all sorts of reasons, but I am not in charge of anything so it’s not going to happen anytime soon.

You’re probably not going to pay an inheritance tax, nor leave a taxable estate for your heirs. That’s okay.

The McCaskey heirs will probably pay an estate tax, and they will probably sell the team to fund it, and the new owners will want a new stadium. It’s going to be a while before the Bears are contenders.

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