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12 sie 2020 · The step-down-in-basis rules apply to non-IRD assets transferred to a beneficiary by reason of the owner’s death, which can include both ‘traditional’ inheritances (e.g., from the original owner to their children), but also include bequests to a beneficiary who is a spouse of the original owner.
A “step-down,” instead of a “step-up,” occurs if a decedent dies owning property that has declined in value. In that case the basis is lowered to the date-of-death value. Proper planning calls for seeking to avoid this loss of basis.
Under the current fair market value basis rules (also known as the “step-up and step-down” rules), an heir receives a basis in inherited property equal to its date-of-death value.
Under the Internal Revenue Code, qualified appreciated assets get a basis adjustment when the owner dies. The new basis of the asset is the generally equal to the fair market value of the asset at the person’s death. This is often referred to as a “step up in basis at death.”
The tax code of the United States holds that when a person (the beneficiary) receives an asset from a giver (the benefactor) after the benefactor dies, the asset receives a stepped-up basis, which is its market value at the time the benefactor dies (Internal Revenue Code § 1014 (a)).
21 paź 2024 · A step-up in basis resets the cost basis of an inherited asset from its purchase (or prior inheritance) price to the asset's higher market value on the date of the owner's death.
22 lip 2020 · Step Up or Step Down in basis (property transferred at death) In contrast to carryover basis, a “step up” basis is a reset of the basis to the recipient. When property is transferred from a decedent to an heir, the original basis of the decedent is stepped up or replaced with the fair market value at the date of the decedent’s death.
