|
|
|
 |
|
Click
to read
my funny law firm murder mystery
Stepped-Up Basis/Carryover Basis A person who dies possessing assets that have increased in value never paid capital gains taxes on the increase in value. The person never sold the assets and never realized the gain. All the gain escapes income tax because of something called stepped-up basis. Whoever gets the assets on death takes as their basis (cost) the date of death value of the assets. When they sell the assets they pay a tax only on the increase in value (if any) since the date of death. For this reason elderly people with appreciated assets often keep them. A beneficiary of a decedent's assets could take the decedent's basis. This is called carryover basis. When the beneficiary sells the assets all the gain accruing during the decedent's lifetime will be realized and taxable to the beneficiary. During 2010 this was the case. For decedent's dying in 2010 the estate can elect carryover basis and no estate tax or the estate tax in effect on January 1, 2011 with its stepped-up basis. When a lifetime gift is made there is carryover basis. The donee takes the donor's basis in the property. || Back
to List of Topics
||
|
|
|
Donald M.
Thompson * 55 W. Monroe #3950; Chicago, IL 60603 |
