In 2026 then you need to pay a lot more...

If the estate tax exemption in 2026 is $5 million, here’s how the tax situation would change:

1. Estate Tax Calculation:

   • Your estate is valued at $20 million.
   • The exemption limit is $5 million.
   • The taxable amount for estate tax is $20 million - $5 million = $15 million.

   The estate tax rate is progressive, with the maximum rate at 40%. For simplicity, let’s assume the rate is at the maximum:

   • Estate Tax Liability = $15 million × 40% = $6 million.

2. Capital Gains Tax:

   • The stepped-up basis would be $20 million, so if your heirs sell the house for its current value of $20 million, there would be no capital gains tax owed, since the basis is adjusted to the market value at the time of death.

So, in 2026, with a $5 million exemption limit, your heirs would face an estate tax liability of approximately $6 million, assuming the estate tax rate is 40% and the full amount above the exemption is taxable. There would be no capital gains tax due on the house if sold for its stepped-up basis value.