Understanding the “Step-up in Basis” when Inheriting Assets - WCS - Tax Accountant in Bel Air MD

Understanding the “step-up in basis” when inheriting assets - WCS - Tax Accountant in Bel Air MD

If you inherit assets after a loved one passes away, they often arrive with a valuable — but frequently misunderstood — tax benefit called the step-up in basis. Below is an overview of how the rule works and what planning might need to be done. What “basis” means First, let’s look at a couple definitions. Basis is generally what the owner paid for an asset, adjusted for improvements, depreciation, return of capital, etc. Capital gain (or loss) e…

Minimizing Taxes on Inherited Assets: How the Step-Up in Basis Works - DWC CPAs and Advisors

When someone passes away and leaves assets to heirs, the recipients often receive a valuable but sometimes misunderstood tax benefit known as the step-up in basis. This rule can significantly reduce capital gains taxes for the beneficiary and is also an important consideration in estate planning. What Is Basis? Basis is generally the original value of an asset for tax purposes, usually what the owner paid for it, adjusted for improvements, depre…