Week 49 Day 6: The Step-Up in Basis: A Massive Tax Break at Death

When you die, your heirs receive your taxable investments with a 'stepped-up' cost basis equal to the market value at the date of your death. If you bought stock for $10,000 and it is worth $100,000 w...

When you die, your heirs receive your taxable investments with a 'stepped-up' cost basis equal to the market value at the date of your death. If you bought stock for $10,000 and it is worth $100,000 when you die, your heirs inherit it at a $100,000 basis. The $90,000 gain is never taxed. This is one of the largest tax breaks in the entire code and it fundamentally changes how you should think about holding appreciated assets.