Quote:
Originally Posted by castlebreakfast
Can you tell me more about this 'stepped up basis'? I'm not familiar with the term.
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Re: Stepped up basis.
Any appreciated asset that you own (usually real estate or stocks) & sell is subject to capital gains tax. For most, the tax is 20% of the appreciation. When you die, the inherited asset’s basis is the appraised value at death. ( that’s the stepped up basis)If your heirs sell their basis is the value of the asset at the time of your death. In other words , they get to keep much more of the money. For a long held lake house, the capital gains would be significant, so if financially feasible,it’s advantageous for an elderly couple to hold the property & leave it in their will to their heirs. Best to do a little reading on tax laws before making a decision.
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