Step up in basis–what is it and why should you care?
September 24, 2015 - Posted by: admin - In category:
Giving away real estate, stocks and other assets that have gained value over time while you are alive may become a costly mistake for the recipient of your gift.
You have likely heard about tax basis and “step up in basis” but perhaps you do not fully understand what is meant by those terms. In fact, unless you are an accountant or attorney (or have one in the family), it is very unlikely that you have a good working knowledge of such things. Our friends at Anderson, Dorn & Rader in Reno, Nevada recently published a nice article on this subject. PLEASE CLICK HERE TO READ THAT ARTICLE.
Please remember that although you are free to gift your home, other real estate and your stock portfolio to your children and/or other beneficiaries while you are alive, in most instances, this will not be the best decision, for a variety of reasons. Several such reasons relate to taxes and this very tax basis issue. By itself, this could be a mistake that costs your intended beneficiary tens of thousands of dollars. There are other very important considerations, including those we discuss in Myth #6 on this website–CLICK HERE TO READ MORE.