Here in the US, my understanding is that if you inherit a stock, then eventually sell the stock, the capital gains tax is calculated as if you had bought the stock at the price that would have been its fair market value on the day you inherited it.
Assuming I'm understanding this correctly (and please correct me if I'm wrong), what would be the reason for this? It seems like an illogical and unfair tax advantage for the person inheriting the stock.
Is this just some kind of political deal that was made because of constituents' negative emotions about the so-called "death tax?" Or is there some kind of rational justification that I'm not understanding that is based on sound principles of economics or accounting?