Contrary to popular view, capital gains do not escape taxation at death as they are subject to the estate tax. The presence of the step-up in basis increases the lock-in effect of capital gains taxes as individuals are induced to hold assets until death. This effect, however, is mitigated by the estate tax which applies to assets passed to heirs. Using a sample of matched income and estate tax records in a period that straddles significant changes in capital gains and estate tax rates, the estate tax is found to have an unlocking effect on capital gains realizations. The realization elasticity with respect to the estate tax rate is estimated at 0.36 in the basic model.