<P> Under Internal Revenue Code § 1014 ( a ) , when a person ( the beneficiary ) receives an asset from a giver ( the benefactor ) after the benefactor dies , the asset often receives a stepped - up basis , which is its market value at the time the benefactor dies . A stepped - up basis is often much higher than the before - death cost basis , which is primarily the benefactor 's purchase price for the asset . Because taxable capital - gain income is the selling price minus the basis , a high stepped - up basis can greatly reduce the beneficiary 's taxable capital - gain income when the beneficiary sells the inherited asset . </P>
<P> Under Internal Revenue Code § 1014 ( a ) , when a person ( the beneficiary ) receives an asset from a giver ( the benefactor ) after the benefactor dies , the asset often receives a stepped - up basis , which is its market value at the time the benefactor dies . A stepped - up basis is often much higher than the before - death cost basis , which is primarily the benefactor 's purchase price for the asset . Because taxable capital - gain income is the selling price minus the basis , a high stepped - up basis can greatly reduce the beneficiary 's taxable capital - gain income when the beneficiary sells the inherited asset . </P>
when do you get a stepped up basis
when do you get a stepped up basis
after the benefactor dies
after the benefactor dies