Step-up in basis is a tax provision that adjusts the value of an inherited asset to its fair market value at the time of the original owner’s death. This means that if a parent bought a home for ...

the asset's basis is increased to the property's fair market value at the date of the previous owner's death. This adjustment is called a "step up" in basis (or "stepped-up" basis). The increase ...

Heirs cannot use losses prior to the original owner's death to offset other investment gains. Understanding and applying the basis step-up rule can significantly cut heirs' tax liabilities.