It's a fair application of the tax law, Richardo (as much as I hate to admit it). A child who inherits stock which has increased in value during the decedents lifetime, pays no capital gains tax upon selling that stock. In that case, the tax man lost the money he would have collected if the old man had done so.

Conversely, why should the child get the benefit of a capital gains deduction if the stock he/she inherited decreased in value during the old man's lifetime?