Quote:
Originally Posted by ullmandds
when inheritance changes hands...the recipient is assessed the value of the inheritance on that transfer date as the value so if they sell that day they will pay no taxes.
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Maybe said another way, the person (or persons) who inherit the assets will step up their basis to fair market value on the date they inherit. So if you bought it for $100, and then die when it's worth $1,000,000, your heirs will have a basis of $1,000,000.
So if they sell right away, in theory there should be no gain or loss, because the sales price should be equal to the fair market value ($1,000,000 in this case), which is their basis.
If they wait to sell, then any appreciation after that date would be taxed when they choose to sell. I suppose the recipient could also choose to pass it down again when they die, in which case it gets stepped up again, at least under current law.
A few years ago, there was a proposal to start to tax gains that hadn't been taxed in the last 90 years. But that proposal hasn't gone anywhere so far, so in theory the inheritance tax benefit process could continue for as long as your heirs continue to not need the money.
09-11-2023, 06:32 PM
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