What is Step-Up Basis | 5-minute read
Step up Basis | Inherited Assets | Inheritance Taxes
Step Up in Basis at Death: Essential Guide for Inherited Assets
Click HERE for the original article by Gary Massey CPA
Summary:
“The step-up basis is a tax code rule that resets the value of an inherited asset to its fair market price at the time of the decedent’s death.”
Awareness of the step-up basis is important for heirs to understand the tax code treatment of inherited assets, and the resulting capital gains implications. Mr. Massey explains the concept clearly and simply with examples and scenarios involving different types of assets, noting expectations and providing illustrations.
Example:
“If a property bought for $100,000 is worth $500,000 at the time of the owner’s death, the heir’s new basis becomes $500,000. If the property is sold for $550,000 later, the heir’s capital gains taxes would be owed only on the $50,000 increase, not the $450,000 increase from the original purchase price.”– Massey and Company CPA
“Step Up in Basis at Death: Essential Guide for Inherited Assets,” covers…
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- Key Takeaways
- Understanding Step Up in Basis at Death
- Example of Stepped-Up Basis
- Assets That Qualify for Step Up in Basis
- Exceptions to the Step Up in Basis Rule
- Valuations After Death
- Valuation of Real Estate
- Valuation of Publicly Traded Stocks and Funds
- Valuation of Private Companies and Other Assets
- Basis Step-Up and Married Couples
- Equalizing Inheritances
Frequently Asked Questions
- What is the step-up in basis at death?
- How does the step-up in basis affect capital gains taxes?
- Which assets qualify for a step-up in basis?
- Are there any exceptions to the step-up in basis rule?
- What are the potential changes to the step-up in basis rules?
- What is the estate tax exemption?
See Original Article: Step Up in Basis at Death: Essential Guide for Inherited Assets
Acknowledgment
Massey & Company CPA’s focus includes helping clients with tax problems. This includes representing clients in front of IRS and state agencies to resolve difficult tax issues, including audits, unpaid taxes, liens, levies, penalties, and notices. This work requires negotiation on a wide variety of tax matters, including offers in compromise, installment agreements, currently not collectible status and penalty abatements. Gary is also a Certified Tax Representation Consultant.
Service to estates including final tax returns for deceased persons, income tax returns for estates and trusts, and estate and gift tax returns are among their core capabilities and experience.
In addition to the main office in Atlanta, Massey & Company maintains licensure and offices in Chicago, IL.
Gary enjoys collecting art and spending time with his wife Chelly, their children, and grandchildren.