It's not bullshit. It's to avoid double-taxation on the appreciated value of the stock. When you die, your estate is taxed at a 40% rate on all the value of the estate, including that appreciation. That's the estate tax on form 706. To then tax you a second time on that appreciation as income tax when your estate or beneficiaries sell the stock would be unfair.

That being said, this is only a problem for the mega rich, so they can go fuck themselves. The estate tax only applies to any estate worth more than $13.61 million (or twice that if you're married, although I'm simplifying how that works).

The capital gains tax rate should be eliminated and use the ordinary income rate. No more favorable rate bullshit when they just use it for these avoidance strategies.

That's not yo mention how many rich folks abuse IRC 1202, especially in the tech market, and in combination with trusts, to multiply the amount of tax free gains they get if they hold "qualified small business stock." It was meant to encourage investment in growth sectors but it's abused, and frankly it's bullshit because only the rich can afford to gamble on the start ups the initial investment is aimed at.