Step-Up in Basis

Home Fairmark Forum Taxation of Investments Step-Up in Basis

  • This topic has 2 replies, 2 voices, and was last updated 1 year ago by chkc.
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  • #7808
    chkc
    Participant

    Will stocks in a decedent’s estate, which are sold before distribution to beneficiaries, receive a step-up in basis?

    Or does the step-up in basis only apply after stocks have been inherited by the beneficiaries?

    Thank you in advance.

    Chris

    #7811
    kaneohe
    Participant

    sounds to me like the estate also gets the step up
    https://www.journalofaccountancy.com/issues/2012/may/estate-planning-20125011.html

    “6. Update Basis of Assets
    Capital gains are relatively rare on an estate Form 1041 because assets generally get a step-up in basis to date-of-death values. ……………………… If the estate sells those assets quickly, there usually is not a lot of time for them to appreciate in value. Any asset acquired from a decedent generates long-term capital gain when it is sold, no matter how long the asset was held before or after the decedent’s death”

    #7819
    chkc
    Participant

    kaneohe,

    Thank you for responding and providing the link to the Journal of Accountancy article.

    Chris

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