"What should happen when the asset being passed down is not MONEY ($s)? Suppose it's a business (privately held) or a large ranch/farm? With insufficient cash to pay the tax bill?"
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The same thing businesses (including farms) have done for centuries when faced with the need to make such a payment without having sufficient liquid assets: take out a loan. No extra capital gains tax, no negative effect on all those people, no reduction in capacity, and (if you do it right) years of tax deductions on the interest.